Hedge fund returns worsen this week as tech selloff deepens
QQQ•All three major hedge fund strategies tracked by Goldman Sachs lost more than 1% on October 22, their first such decline since the COVID-era market rout. Global fundamental long-short funds were down 3.8% in October but remained up 8.8% year to date, while tech-focused hedge funds fell roughly 10% through October 22.
1. Broad hedge fund losses
A renewed selloff in big technology stocks hit global hedge funds, with all three major strategies tracked by Goldman Sachs losing more than 1% on October 22. Goldman said it was the first time since the COVID-era market rout that fundamental equity long-short, systematic and multi-strategy funds all posted losses of that size.
2. Tech pressure spreads
Meta Platforms fell 7% on Thursday after saying it would issue a new class of shares to help raise funds. Nvidia dropped 4%, and the Nasdaq Composite lost 2.6%, its largest decline since June 5. Higher oil prices and concerns about heavy AI spending also weighed on Asian stocks.
3. October performance
Goldman Sachs estimates global fundamental long-short funds fell 3.8% so far in October but remained up 8.8% year to date. Tech-focused and Asia-focused hedge funds were among the biggest losers through October 22, down roughly 10% and 9%, respectively. Market participants said losses in crowded AI-linked trades prompted hedge funds to cut exposure and rein in risk.
