Hedge funds are known for placing concentrated bets as a way to goose up performance and differentiate themselves from benchmarks. What’s unusual now is that they’re all going after a small pool of stocks.
“They take home-run swings, and it’s interesting that they’re swinging at the same names and they’re all getting very confident,” said Rich Weiss, chief investment officer of multi-asset strategies at American Century Investments. “It’s not a great sign. If they become less enamored with those stocks, they get out in a hurry and that’s a concern.”
This article was provided by Bloomberg News.