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Major global money managers sold more Chinese stocks and added U.S. energy stocks to their portfolios at a record pace in recent days, Goldman Sachs reported.
Managers decided to sell Chinese stocks amid heightened geopolitical tensions between the world’s second-largest economy and the United States.
“Chinese stocks sold off net for the first time in a month as concerns about the geopolitical situation rose, driven by de-risking, with long positions sold more than short positions,” Goldman Sachs said.
In addition to geopolitical risks, managers are closely monitoring China’s economic recovery from the COVID-19 fallout. The MSCI index is up 9.6% this year after falling 22% in 2022.
Goldman Sachs compiled data from its clients, including hedge funds and other large money managers, between April 7 and April 13.
Total exposure to China, which includes the funds’ short and long positions, declined 2.6% over the period.
Hedge funds bought net U.S. energy stocks at the fastest pace in three months while selling China, according to Goldman Sachs. The move comes after Saudi Arabia and its OPEC+ allies surprised traders by announcing an unexpected cut in their production targets in early April, as crude oil prices surged this year.
Last week, the bank noted that US net purchases reached a record pace in the past five years.
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