LONDON (Reuters) -Hedge funds fled technology stocks at the fastest pace in 12 months in the latest week, just as the S&P 500 reached all-time highs, a note to Goldman Sachs clients and seen by Reuters said.

The S&P 500, which includes seven tech stocks in its top 10 largest constituents by market value, has surged roughly 28% since its 2025 low, while the Nasdaq Composite has jumped 38% in that time.

As of Friday, the S&P 500's forward price to earnings ratio, which reflects the value of a company's stock relative to its projected future earnings, was 23.11, around five-month highs, according to LSEG/Datastream.

"U.S. equities valuations (such as price earnings ratios) are now 30% higher than their recent decade average, while 10-year yields remain stubbornly high and volatile. The future path of equities may depend partly on a decline in long-term rates; however, we do not seem to be there yet," Lombard Odier Investment Managers head of macro Florian Ielpo said in a note on Friday.

Globally, hedge funds sold tech stocks, some of the most richly valued equities, more than any other sector last week, the Goldman Sachs note said.

Rather than shorting the sector, hedge funds tended to ditch long bets and exit trades, the bank said. A short bet is designed to profit from a drop in an asset price.

This week's exodus was the largest the bank had seen since July 2024, Goldman Sachs said.

Hedge funds fleeing tech stocks centered on trading in North America and Europe.

Every kind of tech stock was sold, including semiconductor chip companies, as well as those in software and IT services, the bank said.

Meanwhile, shares in consumer staples - companies that sell items that people purchase regardless of economic conditions - were among the most net bought U.S. stock sectors this week, Goldman said.

Hedge funds piled into these stocks for the fourth straight week and their trades were almost entirely long positions - those that will profit if the stock prices rise.

The kind of companies whose shares hedge funds bought included those that sell food and beverages and personal care products.