Hedge funds reduced equity exposure at the fastest rate in two months, with the Goldman Sachs Prime Services desk selling global stocks for the first time in a month. The pace of reduction reached 2.3 standard deviations below the year-earlier average, according to data published on Monday.
The desk’s net leverage fell to 76.8%, placing it at the 27th percentile over the past year. Long positions were sold at nearly twice the rate of new short positions, with a ratio of 1.8 to 1. Information technology bore the brunt of the liquidations, recording the largest percentage drop in gross exposure in more than two years.
Energy was the only sector to attract net buying, marking its highest inflows in nearly four years. The sector saw net inflows in 12 of the last 13 weeks. All major regions participated in the selling, with North America and Asian emerging markets leading in dollar turnover. The desk’s activity reflects a broad shift in positioning amid shifting market dynamics.
