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- Hedge funds have rarely been this underweight North American stocks
Hedge funds have rarely been this underweight North American stocks
The current hedge fund market positioning may surprise you
Global Markets Investor
May 05, 2026
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GLOBAL MARKETS INVESTOR’S PORTFOLIO IS 🔥UP +100%🔥SINCE JANUARY 2024
DURING THE MARCH-APRIL 2025 MARKET TURMOIL, MAJOR US INDEXES FELL NEARLY 20%, WHILE THE GMI PORTFOLIO GAINED OVER 5%, FIND OUT HOW BELOW:
Hedge funds sold North American stocks for 3 consecutive weeks despite 3 consecutive weeks of S&P 500 all-time highs, according to Goldman Sachs.
This has pushed their allocation to North American equities down to the lowest on record relative to the MSCI All World Index.
At the same time, their allocation to Emerging Markets is up to an all-time high.
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The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
As you can see, the positioning change started in 2022 and accelerated in 2025.
As a result, since mid-2025, the emerging market ETF, $EEM,, has surged +38%, outperforming the S&P 500 total return ETF, $SPXTR,, which is up +19%.
Meanwhile, global stock market breadth is flashing a warning signal.
The MSCI World 14-day RSI has just crossed above 70, reaching overbought territory.
At the same time, only a small % of index members have RSI above 70, meaning the index is overbought, but most stocks inside it are not.
This is a classic sign of a narrow, fragile rally and weak breadth.
Market breadth measures how many stocks are actually participating in a rally. A healthy market rises on broad participation, while a narrow one is propped up by only a handful of names.
Considering systematic buying from CTAs has faded, pension funds turned net sellers into month-end, and the tax refund-driven retail buying wave is set to abate, collectively suggesting the market is ready to let off steam after its run to all-time highs.
Furthermore, May is historically the largest month of the year for retail outflows.
Is the market overdue for a correction?
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