AI selloff hammers hedge funds this week, Asia managers lead losses
SMH•Global fundamental long-short hedge funds lost 2.9% in the week to October 15 as AI bets unwound, while Asia-focused funds were hit hardest. Asia-focused stock pickers have lost 6.8% so far this month, Goldman Sachs said.
1. Funds post weekly losses
Global fundamental long-short funds lost money every day this week, with losses totaling 2.9% through October 15, Goldman Sachs said. They are up 14.3% year to date. On Wednesday, Asia-focused stock pickers fell 2.6% and technology-focused funds lost 2.0%; systematic long-short and multi-strategy funds declined roughly 1%.
2. AI and chip stocks slide
Investors are questioning whether heavy AI spending can pay off soon as elevated inflation keeps borrowing costs high. Hotter-than-expected U.S. inflation data raised expectations of further rate hikes and fueled selling in semiconductor and AI supply-chain stocks. South Korea's KOSPI fell 8% on Thursday to a six-month low, while Taiwan stocks lost more than 3%.
3. Asia losses deepen
Asia-focused stock pickers have lost 6.8% in the first half of October, erasing more than half of gains from their late-June peak, when they were up more than 40% for the year, Goldman Sachs said.
