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Hedge funds trim global equity exposure at fastest pace in two months

Data cited by Goldman Sachs Prime Services shows the cut was driven mainly by long position sales, while energy was the only sector seeing net buying for 12 of the past 13 weeks.

Reported · Written up by our desk · Hedge Funds

Hedge funds reduced their exposure to global equities at the fastest pace in two months last week, with selling of existing long positions outpacing the establishment of new short bets, according to data from Goldman Sachs Prime Services as summarized by Hedgeweek and cited by Investing.com.

The move marked the first weekly decline in global equity exposure among Goldman-serviced hedge funds in a month and fell 2.3 standard deviations below the average level from the prior year. Long positions accounted for most of the reduction, with long sales outpacing new short creation by 1.8 to 1.

Selling was widespread across regions, led by declines in North America and emerging Asian markets measured in dollar terms. Information technology was the most heavily sold sector, and the reduction in long positions produced the sector’s sharpest percentage drop in gross exposure in more than two years.

Energy stood out as an exception, registering net buying and attracting its strongest inflows in almost four years. The sector has recorded net purchases in 12 of the past 13 weeks, while aggregate net leverage across the Goldman Prime Services book fell to 76.8%, a level Hedgeweek said points to relatively modest equity risk.

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