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Retail investors boosted hedge funds’ favourite stocks in first quarter

Retail investors shifted money into large-cap growth stocks, boosting momentum strategies then favoured by many hedge funds, says Goldman Sachs

Hedge funds’ favourite holdings were boosted by a surge in trading activity by smaller investors, data from Goldman Sachs shows.

The first quarter saw a “surge” in retail investor trading activity with daily average trades climbing more than twofold at the beginning of the year, compared to previous years. Robinhood, the popular trading platform for younger investors, saw triple the activity early this year, according to Goldman Sachs’ hedge fund trend monitor.

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