Top global money managers have sold off many Chinese stocks and added US energy stocks to their portfolios at a near-record pace in recent days, according to a Goldman Sachs report.
The managers decided to sell Chinese stocks amid rising geopolitical tensions between the world’s second largest economy and the United States.
“As concerns about the geopolitical situation mounted, Chinese stocks sold net for the first time in a month, driven by risk reduction, with more longs selling than shorts,” Goldman Sachs said.
In addition to geopolitical risks, Directors are closely monitoring China’s economic recovery from the COVID-19 recession. The MSCI index is up 9.6% this year, after falling 22% in 2022.
Goldman Sachs collected data from its clients, including hedge funds and other large money managers, for the period between April 7 and April 13.
Total exposure to China, including short and long positions for funds, decreased by 2.6% over the period.
While selling China, hedge funds bought US energy stocks at the fastest pace in three months, according to Goldman Sachs. The move was prompted by an increase in crude oil prices this year after Saudi Arabia and its allies in OPEC+ surprised traders by announcing an unexpected cut in their production target in early April.
The bank noted that US net purchases last week reached a near-record pace in the past five years.
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