Hedge funds pile into financials

Hedge funds are on the verge of becoming net buyers of financial shares for the first time in several years, according to research from Swiss bank UBS. Market strategist Karen Olney said long/short funds were buying into global equities at their fastest pace since 2007, particularly banking shares where they believed fears over tighter regulation were overblown. The move by traders into financials suggest the sector, which took a heavy battering during the credit crunch, is on the road to recovery. Figures compiled from UBS’ prime brokerage unit also showed hedge funds were building up major positions in industrials, with the average fund around eight per cent overweight in the area versus the market.