Goldman Sachs note shows trend hedge funds post worst week since 2024
A broad selloff in technology shares and renewed questions over returns on heavy artificial intelligence spending are driving sharp moves across equity and bond markets. Trend-following hedge funds record their weakest weekly performance in two years last week, while other long-short strategies also post losses.
Highlights
- Systematic long-short hedge funds dropped 2% last week and fundamental long/short strategies lost 1.1%, as reported by Goldman Sachs.
- Nasdaq 100 fell 5.5% last week—its biggest weekly drop since April 2025—driven by Meta’s 10% slide and broad equity weakness.
- Goldman Sachs prime brokerage saw $20 billion in tech stock selling over two weeks, signaling significant risk reduction and elevated market volatility.
Market volatility hits hedge fund strategies
As reported by Reuters, citing Goldman Sachs in a note, systematic long-short hedge funds fell 2% last week, marking their worst weekly performance since 2024. The bank said fundamental long/short strategies lost another 1.1% over the same period.The pullback comes as the Nasdaq 100 drops 5.5% last week, its biggest weekly fall since April 2025, when U.S. President Donald Trump's Liberation Day tariffs roil global markets. Meta leads part of the equity decline with a 10% weekly slide after reporting strong earnings but signaling it needs to raise more capital for AI investments.
Goldman also says single stocks collectively see the biggest de-grossing activity since late July. Its note adds that U.S. equities are net sold for a third straight week and in four of the last five weeks.
Tech selling and bond moves shape wider impact
Goldman says its prime brokerage desk reports $20 billion in tech stock selling over the last two weeks, close to the $23 billion unwind recorded in July. The scale of the selling points to a broader reduction in risk appetite among hedge funds as volatility rises.Bond markets are also unsettled, with investors moving into the relative safety of U.S. Treasuries while selling debt from more fragile economies such as France. Despite the latest setback, Goldman says fundamental long/short strategies are still up 8.8% this year, while systematic strategies remain up 18.7% year to date.
Our earlier Nasdaq 100 (NDX) analysis tracked the index’s decline despite strong SpaceX results and ongoing AI optimism, highlighting persistent sell-side pressure. We noted NDX was trading below its 20-day and 50-day moving averages, with momentum indicators still favoring sellers and key levels in focus around 29,076 support and the 28,492–29,593 near-term range.
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