Global fundamental long-short funds lost 2.9% in the week to October 15, while Asia-focused stock pickers fell 6.8% in the first half of October. The losses came as investors questioned whether heavy AI spending can pay off soon and inflation data increased expectations of further U.S. rate hikes.
Global fundamental long-short funds lost money every day during the week to October 15, shedding 2.9%, Goldman Sachs’ prime brokerage unit said. They remained up 14.3% year to date. Goldman said managers had sold global AI stocks for six straight sessions.
Asia-focused managers fell 2.6% on Thursday, when global stock pickers lost 0.9%; tech-focused funds were down 2.0%. Asia-focused stock pickers lost 6.8% in the first half of October, erasing more than half of their gains from a late-June peak above 40% for the year, Goldman said. Semiconductor-heavy markets also fell, with South Korea’s KOSPI down 8% on Thursday and Taiwan stocks losing more than 3%.
Erlen Capital Management’s Bruno Schneller described the move as a rapid unwinding of a crowded trade rather than a fundamental rejection of AI. He said hotter-than-expected U.S. inflation data prompted markets to reassess interest rates, pressuring capital-intensive parts of the AI sector. CoreWeave bonds sold off sharply during the week, pushing yields above 15%.
