Everyone Piling Into Semis: What Hedge Fund and Mutual Fund Positioning Tells Us About the Market

Institutional investors are rotating heavily from Software into Semiconductors, with Hedge Funds reporting record-high exposure to Semis. While hedge funds have returned 7% YTD, only 30% of active mutual funds are outperforming their benchmarks.

Key Takeaways

• 1.Both hedge funds and mutual funds are rotating aggressively out of Software and into Semiconductors, with Semis weights hitting record highs in HF portfolios.
• 2.Mutual funds are struggling to beat benchmarks in 2026, with only 30% outperforming compared to a historical average of 37%.
• 3.Hedge funds and mutual funds disagree on Financials and Consumer Discretionary sectors while agreeing on Industrials (overweight) and Info Tech (underweight).

Table of Contents

• Introduction
• 1. US equity hedge funds have ridden the recent wave of Momentum outperformance
• 2. Hedge funds and mutual funds each carry above-average equity market exposures
• 3. Positioning filings show funds agree on most sectors
• 4. Within Info Tech, positioning mirrored the broader market shift from Software to Semiconductors
• 5. Shared favorites this quarter: BA, MA, MRVL, V
• 6. Shared favorites performance and track record

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