As concerns over AI stocks and semiconductor-related names persist, hedge funds are turning to defensive strategies to limit losses, prompting views that markets will remain subdued through year-end.
The Nikkei Average rose for a third straight day on the 11th, but trading remained volatile, and caution toward AI and semiconductor-related names was still strong. With market volatility continuing, moves to pursue short-term excess returns have been restrained.
Hedge funds are said to be adopting a defensive stance that prioritizes safety in order to limit losses. There are concerns that this could weigh on stock prices toward year-end.
Regarding market conditions, market participants sought the views of an alternative-investment manager at Sumitomo Mitsui Trust Bank on the impact of recent sharp volatility on hedge fund management.