Hedge funds buy the dip amid market bloodbath, says Goldman

By Carolina Mandl

NEW YORK (Reuters) - Global hedge funds hunted for bargains in the stock market on Monday amid a violent sell-off in U.S. equities, in the largest one-day buying spree in five months, Goldman Sachs said in a note to clients.

The bank, which tracks the flows of its hedge fund clients, added long positions mainly in information technology, on a day the sector index was down 3.78%.

"Nearly all tech subsectors were net bought on Monday (sans tech hardware), led by semis & semi equipment and software," Goldman Vice President Vincent Lin said in the note.

Still, hedge funds remain underweight in information technology, around the lowest levels in more than 10 years.

They also hunted bargains in healthcare, staples and utilities, but sold stocks in consumer discretionary, real estate and financials.

Ahead of Monday's sell-off, hedge funds had been selling more than buying stocks and added more bearish positions for roughly two weeks.

Global fundamental long/short hedge funds fell 1.38% on Monday, while systematic long/short funds were flat. In the year, they are up 4.43% and 17.10%, respectively.

(Reporting by Carolina Mandl in New York; editing by Jonathan Oatis)