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Crowded AI trades unwind as hedge funds cut risk and leverage
Managers are reducing leverage and exposure as AI related positions unwind during a period of heightened market volatility.
Hedgeweek reports that hedge funds have faced a sharp setback in recent weeks as crowded artificial intelligence related trades have unwound.
According to the report, the sell down prompted many managers to scale back leverage and reduce risk exposure.
The pressure has been amplified by heightened market volatility, which has contributed to managers cutting back on crowded positions tied to the AI trade.
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