MS · News · 20261103N

Client Sector Trading Activity

MORGAN STANLEY · 2026-11-03 · Importance 25 · Surprise 32

Morgan Stanley Prime Brokerage data indicated that cumulative gross hedge-fund flows had fallen 8% from their June peak. Hedge funds had turned underweight the broader AI trade for the first time since early 2023, after a prolonged period of de-risking. AI and technology stocks were central to the retreat, with managers cutting exposure through the summer and October selloffs without rebuilding positions in between.

Key facts

• According to Morgan Stanley, hedge funds turned underweight the broader AI trade for the first time since early 2023. source
• Morgan Stanley Prime Brokerage data showed cumulative gross hedge-fund flows had fallen 8% from their June peak. source
• Morgan Stanley reported that the shift followed the longest sustained stretch of hedge-fund de-risking in more than 15 years. source