Since Trump’s election, the US stock market has climbed unstoppably along a remarkably steep path to round off at a teetering height. Is this the irrational exuberance that typically marks the last push before a perilous plunge?
Another day, another prominent hedge fund shutters it doors in less than a year after launching a world in which investors increasingly skip "active investing", and instead give their cash to far cheaper, and far more effective - if only for the time being - "passive" strategies.
"The average hedge fund has returned +4% YTD, lagging the S&P 500 (+9%) for the eighth year in a row. The latest hedge fund and mutual fund filings highlight Info Tech stocks as particularly vulnerable in terms of positioning"
It's not just Paulson who's had a terrible year: so has the majority of the hedge fund community, as confirmed by the record outflows from active managers, which as BofA forecast overnight, will be eclipsed by passive managers some time in 2023.
As BofA reports in its latest weekly client flow update, the bank's largest, institutional clients have now sold stocks for a record 21 consecutive weeks. The reason: soaring redemption requests as clients continue to shift out of active funds and into cheaper, passive options.