A report by investment research firm Preqin has revealed that hedge funds significantly increased their equity holdings in the lead-up to last week's market drop. The data shows that many top-performing funds were 'loaded up' on equities, which some analysts believe may have contributed to the sharp decline in the FTSE 100 index.
The FTSE 100 saw a significant drop of 2.3% on Friday, wiping out previous gains and marking one of its largest declines this year. The sell-off has raised concerns about economic stability and investor confidence, with many experts warning that the market may be due for further correction.
According to Preqin, some of the top-performing hedge funds increased their equity holdings by as much as 20% in the months leading up to the market drop. This increase in exposure to equities may have put pressure on the market, making it more vulnerable to downturns.
Analysts are now warning that investors need to be cautious and review their portfolios in light of the recent market movements. 'This is a timely reminder for investors to remain vigilant and not get caught up in the momentum of rising markets,' said one analyst.