Hedge Funds Ignoring Tech Drop Boost Bullish Bets To 1-Year High
By Sofia Horta E Costa
Last week?s slump in biotechnology and social-media shares isn?t putting off large speculators. They?re the most bullish in more than a year on the Nasdaq 100 Index.
They increased their net-long positions on the U.S. equity gauge for a fourth straight week to almost 88,400 e-mini futures, according to data from the Commodity Futures Trading Commission. That?s the most since March 2014.
Investors are plowing more money into a bet that has been paying off since 2012, when hedge funds and other speculators turned bullish on the Nasdaq 100. Traders added $143 million to the biggest exchange-traded fund tracking tech companies last week, the most since January, data compiled by Bloomberg show.
?Tech is the first place investors look at if they?re focusing on growth,? said Virginie Robert, co-founder of Paris-based asset-management firm Constance Associes. ?Some of these companies can generate a lot of cash, increase their dividend and buybacks. But not all tech is created equal.?
Financial results beat estimates at companies such as Microsoft Corp. and Amazon.com Inc., while Apple Inc. and Comcast Corp. increased plans to return cash to shareholders. Others weren?t as successful this earnings season. LinkedIn Corp. and Twitter Inc. tumbled more than 20 percent last week after revenue fell short of projections and they cut their annual sales forecasts.
That helped drag the Nasdaq Composite Index down 1.7 percent. An index tracking social-media shares sank the most since October, and the Nasdaq Biotechnology Index tumbled 5.5 percent, ending April at a two-month low. The Nasdaq Composite closed on Monday 1.5 percent away from an April record. Nasdaq 100 futures slipped 0.2 percent at 7:50 a.m. in London.