by Nell Mackenzie
LONDON (Reuters) – Hedge funds are growing optimistic about European companies that sell things people want but don’t necessarily need, according to a Goldman Sachs note on Wednesday seen by Reuters on Thursday.
European consumer discretionary stocks such as household appliances, luxury items and leisure triggered fresh buying into hedge funds.
But they sold short stocks that were exposed to President Donald Trump’s potential tariffs, the memo said.
“As the tariff landscape evolves, hedge funds are increasingly shortening tariff-exposed names,” the memo said.
Disclosed short positions in the Italian spirits group have reached an all-time high, according to a separate report from research firm Breakout Point.
Campari has three production sites in Mexico, with the main tequila producing under the Espolon brand and one in Canada, according to its latest sustainability report.
According to Citi, Campari imports 27% of its U.S. sales from Mexico and Canada, Reuters reported on Monday.
Hedge funds with jobs disclosed to Campari include Citadel and investment managers Arrow Street Capital and Gladstone Capital, regulatory filings from the Italian Market Authority showed.
Citadel declined to comment. Arrowstreet Capital, Gladstone Capital and Campari did not immediately respond to requests for comment.
A trader is shorting an asset in the expectation that its value will decline.
Most of this activity since mid-December has focused on European equities, while activity in UK equities has remained relatively subdued, the note said.
In 2024, Luxury was a major short-term target for hedge funds. But since this latest earnings season began, speculators have changed their bearish tune.
According to the memo, the number of buyers of cars and auto parts buyers in Europe has shrunk compared to those who sell, compared to those who sell I am purchasing.
(Reporting by Nell McKenzie; Editing by Amanda Cooper and David Evans)
