Hedge funds reduced their equity positions at the fastest pace in two months during the week ended Aug. 22, according to Goldman Sachs’ Prime Services desk. The selling marked the first weekly outflow from global equities in a month and represented a 2.3 standard deviation move relative to the past year’s trading patterns.
Long positions were liquidated at nearly twice the rate of new short sales, with the ratio standing at 1.8 to 1. Net leverage across the desk’s book fell to 76.8%, placing it in the 27th percentile over the past 12 months. Selling was broad-based across regions, with North America and Asian emerging markets leading dollar-weighted outflows.
The technology sector bore the brunt of the de-grossing, recording its largest percentage reduction in long exposure in more than two years. In contrast, energy was the only sector to attract net buying, extending a 13-week streak of inflows that reached their highest level in nearly four years.
The shift in positioning underscores a cautious stance among hedge funds amid shifting market dynamics, with technology’s sharp de-leveraging highlighting sector-specific concerns.
