Global hedge funds hammered by AI selloff this week, Asia managers lead losses
SMH•Global fundamental long-short funds lost 2.9% in the week to October 15, while Asia-focused stock pickers lost 6.8% in the first half of October. Goldman Sachs said global AI stocks had been sold by long-short managers for six straight sessions.
1. Funds retreat as AI bets unwind
Global hedge funds suffered steep losses this week after an unwind of AI bets, with Asia-focused funds hit hardest. Goldman Sachs’ prime brokerage unit said global fundamental long-short funds lost money each day of the week, down 2.9% through October 15, though they remained up 14.3% year to date. The unit said global AI stocks had been sold by long-short managers for six consecutive sessions.
2. Asia managers lose ground
On Thursday, global stock pickers lost 0.9%, including a 2.6% decline for Asia-focused managers and a 2.0% drop for technology-focused funds; systematic long-short and multi-strategy funds each fell roughly 1%. Asia-focused stock pickers lost 6.8% in the first half of October, erasing more than half their gains from a late-June peak above 40% for the year. Hotter-than-expected U.S. inflation data, expectations of further rate hikes and higher oil prices added to market pressure. CoreWeave bonds sold off sharply this week, pushing yields above 15%. South Korea’s KOSPI fell 8% on Thursday to a six-month low, while Taiwan stocks lost more than 3%.
