By Nell Mackenzie
LONDON, June 5 (Reuters) – Hedge funds, particularly those trading stocks, beat global benchmarks in May as rising equities led by the U.S. tech sector buoyed the returns of traders.
Stock-picking hedge funds returned 5.35% in May compared to the MSCI total return index, which posted a 4.55% gain, said a note from Goldman Sachs seen by Reuters.
The S&P 500 finished May with its ninth straight weekly gain, its longest winning streak since December 2023, fueled at the time by hopes of progress towards a peaceful resolution of the Iran war.
Hedge funds jumped into the May market rally to buy stocks at the fastest pace since June 2025, the Goldman note said.
Speculators bought information technology, consumer discretionary, financials and industrials stocks, it added.
Energy, communications services and consumer staples were the only sectors that were, on balance, sold.
Crowded long trading positions added to gains, the note said, as the number of investors continuing to buy stocks pushed prices higher and created a momentum that increased winning bets.
A long position is a bet that an asset will rise in value.
Sectors such as tech helped both stock pickers and systematic traders while losses stemmed from positions on industrial firms, said Goldman.
Systematic stock trading hedge funds returned 0.84% in May, said the note.
Total borrowing increased at one of the fastest rates recorded by Goldman in the last five years, the bank said.
Hedge fund leverage now stands at a five-year high.
Some of the biggest multi-strategy hedge funds like Schonfeld and Millennium returned 2.6% and 2.4%, respectively.
(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Kevin Liffey)
