Benzinga - Hedge funds raised stakes in financial sector stocks amid the banking crisis in March with lower prices presenting buying opportunities, according to a report that cited an S&P Global Market Intelligence note.
What Happened: “Hedge funds used the bank stress as an early buying opportunity, dismissing speculation that a significant crisis was at play,” S&P said, according to a Reuters report.
The firms increased their exposure to financials by 5.5%, after having trimmed it by 3.9% in February, it said.
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Citadel, which is among the world’s most profitable hedge funds, stated in March that it bought a 5.3% stake in Western Alliance Bancorporation (NYSE:WAL), according to the report.
Hedge funds increased their exposure to financials more than any other sector while they added $13.5 billion in stocks across all sectors in March. However, traditional asset managers reduced their positioning in financials by 1.1% and also cut $20.2 billion in equities stakes across other sectors, the report said.
“The group saw an opportunity to pick up banking names at a significant decline and, in order to do so, sold down holdings in the better-performing materials and energy sectors,” Christopher Blake, executive director of S&P Global Issuer Solutions wrote.
Bank Earnings: Investors and traders are now keenly watching out for the start of the earnings season with big lenders like JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C) and Wells Fargo & Co (NYSE:WFC) scheduled to report their results.
Deposit figures would be a key metric that would be in focus following the banking turmoil that saw billions of dollars flow into high yielding money market funds.
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