Hedge funds bet against power and pile into materials, says Goldman Sachs

By Nell Mackenzie

LONDON (Reuters) – Global hedge funds sold U.S. electric and water utilities stocks at the fastest pace in two months while buying U.S. materials stocks such as chemicals, metals and mining as well as paper and forest shares in the week to Friday, Goldman Sachs said.

U.S. utilities shares are now among the most sold U.S. stock sectors in November, showed a note from Goldman Sachs prime brokerage sent to investors on Friday and seen by Reuters on Monday.

The Dow Jones Utility Index which tracks a collection of U.S. utilities stocks rose just over 3% last week and has risen more than 20% so far in 2024.

Most utilities stocks including electric and water were sold except for gas utilities, said the note which tracks weekly hedge fund sales.

Materials was the most net bought U.S. stock sector on Goldman Sachs’ trading desk last week.

Buying spanned the entire stock sector, led by chemicals then metals and mining, as well as paper and forest products, said the bank note.

An S&P index tracking U.S. materials stocks rose 1% in the week ending Friday and has risen over 9% so far in 2024.

Hedge funds have bought materials stocks in three of the last four weeks and the sector is among the most net bought in the United States on Goldman Sachs’ prime brokerage desk, said the bank.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Emelia Sithole-Matarise)