After months of caution in the run-up to the US presidential election, hedge funds have become big buyers of US stocks.

Gross trading activity at hedge funds, which includes both long and short bets, rose the most in seven months on Wednesday, with a surge in long positions accounting for most of the movement, according to data compiled by Goldman Sachs Group Inc.The leading brokerage show. The purchase occurred while they were covering short bets on large- and small-cap exchange-traded funds.