Last week, Goldman Sachs' main brokerage division pointed out that hedge funds have been heavily net-selling technology stocks in the past month, particularly semiconductor stocks, including Nvidia. In June, net sales of hedge funds in the US TMT sector will set a new record for Goldman Sachs' main brokerage business.

A few days later, Goldman Sachs again pointed out that the selling by these "smart money" has spread from technology stocks to almost all stocks, although technology stocks are still at the top of the list of stocks being sold.

Goldman Sachs' data shows that hedge funds are reducing their risk exposure through long closings and smaller short positions. The total long and short leverage ratio has been continuously declining for six weeks, and the net leverage ratio has fallen to 53%, the largest drop this year, indicating that hedge funds are becoming more cautious. Flow data shows that hedge funds have been net-selling US stocks for three consecutive weeks, mainly driven by long closings.

Goldman Sachs pointed out that 8 of the 11 major sectors in the US stock market have experienced net sales, mainly in the information technology, daily consumer goods, real estate and financial sectors, while the industrial, materials and energy sectors have experienced net purchases.

However, after net sales of the materials sector by hedge funds for 6 of the past 7 weeks, they have begun to buy into this sector at the fastest rate in 5 months, with long purchases exceeding short sales at a ratio of about 5:1. Almost all sub-sectors (except for containers and packaging) have achieved net purchases, led by chemicals and metals & mining sectors.

However, unlike hedge funds trying to discreetly sell, retail investors continue to rush into the "big seven."

Vanda Research pointed out that while hedge funds are quietly "leaving" technology stocks, retail investors continue to pour in, especially semiconductor stocks led by Nvidia.

It is difficult not to draw the conclusion that hedge funds are throwing a large number of technology stocks to retail investors. Under the calm surface of the market, there may have been a large turnover of stocks, and hedge funds are likely selling record amounts of technology stocks to retail investors.

Therefore, Vanda warns that this is still an area that deserves close attention, as it may become a source of instability in the future, and hedge funds are doing their best to stay ahead of this 'instability.'

Editor/Emily