Senad Karaahmetovic
2 min read
Investing.com – October marked the first month since Goldman Sachs began tracking in 2016 that both fundamental long-short and systematic hedge fund cohorts each fell more than 3% in the same calendar month, according to the bank’s prime brokerage desk.
Fundamental long-short funds lost 3.5% and systematic strategies declined 3.6% while the bank’s clients were net sellers of global equities by the largest dollar amount in seven months during October, with long sales outpacing short sales four-to-one — a ratio the desk attributed to de-risking rather than outright bearish conviction.
Net leverage across the entire prime book fell 4.2 percentage points to 73.4%, the fastest monthly decline since March. At the heart of the selling was technology with the data showing roughly $20 billion of technology-stock sales over two weeks in October, approaching the approximately $23 billion sold during July’s unwind episode.
Five consecutive sessions of net selling in global AI stocks between October 8 and October 14 erased all cumulative net AI purchases recorded since the start of 2025. Asia-focused managers bore the sharpest pain, losing 9.4% on the month, and the median fund outperformed the asset-weighted average — a sign that the largest shops fared worst.
The selling was selective rather than wholesale. Information technology, industrials and materials drew the heaviest net selling; consumer discretionary, real estate and healthcare attracted net buying, suggesting rotation was at least as important as pure risk reduction.
Macro products and index instruments were net bought, meaning managers shed single-name exposure while keeping broader market access.
Europe was only marginally net sold, and hedge-fund overweights to Europe rose to a one-year high of 3.5%, with the UK, France and Spain among the most actively bought markets.
Original Article
Goldman data shows hedge funds cut leverage at fastest pace since March
European shares slide as Apple margin warning trigger global tech rout
Rising shorts cool U.S. large-cap positioning, cutting liquidation risk: Citi
