Hedge Funds are still very underweight Small Caps despite the group’s recent outperformance

DavidMarlin
2023-12-21

Hedge Funds are still very underweight Small Caps despite the group’s recent outperformance.

According to MS Quant Desk, the L/S Ratio for Russell 2000 Names is in the 17th percentile since 2020 (near 3 year lows).

$iShares Russell 2000 ETF(IWM)$ $Direxion Daily Small Cap Bull 3x Shares(TNA)$ $SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ Trust-ETF(QQQ)$ $E-mini Russell 2000 - main 2403(RTYmain)$

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The Nasdaq's domination over Small Caps has never been greater.

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Over the last 3 months, Hedge Funds have been selling stocks at a rapid pace.

According to GS Prime, the combined net selling from August to October was the 2nd largest over any 3-month period in the last 10 years (behind only Q1 ‘22) and ranks in the 99th percentile.

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https://twitter.com/Marlin_Capital/status/1737500867287265364

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