Hedge funds suffer broadest daily losses since Covid as tech stocks tumble

On Thursday, global hedge funds endured their most extensive daily selloff since the onset of the Covid pandemic, as reported by Bloomberg using data from Goldman Sachs prime brokerage. Funds across the board experienced losses exceeding 1%, with fundamental, systematic, and multistrategy funds all posting declines. The losses were particularly severe for US technology stocks, which plummeted amid renewed doubts about AI investment returns and the impact of rising oil prices on inflation.

Goldman Sachs data revealed that over two-thirds of hedge funds concluded the trading day in the red, with concentrated short positions facing additional stress during the latter half of the session. This widespread drawdown marked the first instance since the pandemic that all three primary strategy groups experienced declines of more than 1% within a single trading session, according to Goldman.

The fundamental long-short equity funds suffered a 1.4% loss, marking their worst session since July 16. Telecommunications, media, and technology-focused managers experienced average losses of 2.7%. Systematic long-short funds declined 1.3%, marking their third-worst session since December 2023. Multistrategy platforms were hit hardest, with losses amounting to 1.9%, marking their second-largest daily decline since the April 2025 tariff-driven sell-off.

Asia-focused fundamental long-short managers also faced significant losses, extending their month-to-date decline to 9.3%, although the strategy remains up 14.2% year-to-date.