Global fundamental long-short funds lost 2.9% in the week through Oct. 15, according to a Goldman Sachs note cited by Reuters, as separate bank data showed its hedge fund clients cutting technology positions.
The funds remained up 14.3% year to date, the note said. The weekly return measures fund performance; Goldman’s separate positioning figures measure technology holdings in its global prime brokerage book.
The technology reduction was the largest by percentage for Goldman’s hedge fund clients in records dating to 2016, Bloomberg News reported, citing a bank note. It took place over five trading sessions through Oct. 15. The record describes the proportional cut, not the dollar value of shares sold.
After the sales, Goldman’s global prime brokerage book still had a 23.5% net allocation to technology. The note cited by Bloomberg placed that reading at the 90th percentile of the previous five years. Among technology groups, semiconductor stocks accounted for the most selling in dollar terms.
Goldman’s clients also reduced net leverage to 48.6%, its lowest level in a year, according to the note cited by Bloomberg. Net leverage compares long and short positions to gauge funds’ market exposure. These positioning figures describe Goldman’s clients, not hedge funds across the industry.
Reuters described an unwind of AI bets and concern about returns on AI spending. The available reporting does not establish a single cause for Goldman clients’ broader technology cut.
The Nasdaq-100 fell 5.49% between its Oct. 9 close of 30,883.15 and its Oct. 16 close of 29,187.55, according to Nasdaq data. That change covers the five trading sessions from Oct. 12 through Oct. 16. Goldman’s positioning window began Oct. 9 and ended Oct. 15, so the two measures have different start and end dates.
