(HedgeCo.Net( A notable rotation in hedge fund allocation is underway: firms are trimming exposure to U.S. equities and reallocating toward global industrial and manufacturing sectors, according to Reuters. Reuters
The disinvestment from U.S. equities is not wholesale, but selective. Many funds believe that relative valuations and margin pressures in U.S. sectors (e.g. consumer, tech) reduce upside. Instead, industrial and global production-linked names are seen as better positioned for recovery, especially in Europe and Asia. Reuters
This rebalancing is also tied to macro themes. Rising interest rates, policy discontinuities, and supply-chain stresses have shifted investor attention to more cyclical names. Hedge funds are leveraging deep thematic and macro views to tilt toward secular industrial beneficiaries—automation, advanced manufacturing, infrastructure, green energy transition, and supply reshoring.
At the same time, hedge funds are becoming more global in their approach. U.S. markets, while deep and liquid, are increasingly viewed as crowded. Many hedge funds are scouting opportunities in Asian and European industrial firms where valuations are less efficient and where growth regimes may surprise to the upside.
This trend underscores a broader industry shift: hedge funds are less about opportunistic long-short trading in domestic names and more about strategically positioning based on macro, supply chains, and structural innovation. It remains to be seen whether these rotating bets outperform in a volatile environment, but the directional move is clear.