Equity hedge funds cut risk in portfolios, less confidence in rallies

Jon Caplis notes in speaking with many of these managers, a common theme is “the notion that rates will stay higher for longer is much more accepted today than when the Federal Reserve was continuously hiking in late 2021 and early 2022. While these higher rates haven’t necessarily been fully discounted into lower valuations, they have generally decreased confidence.”

Additionally, our analysis shows that the PivotalPath: Equity Diversified: U.S. L/S Fundamental Index’s exposure to the S&P 500 fell in the 12 month period through September to its lowest level since late 2017 / early 2018.

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