Major investment funds dramatically increased their negative bets on American stocks and Asian emerging markets last week, while simultaneously placing positive wagers on European equities, according to a Goldman Sachs client report obtained by Reuters on Monday.
The selling of global equities reached unprecedented levels during the week, marking the most significant net selling activity since April 2025. This represents the fifth consecutive week that speculators have taken short positions, betting that stock prices will decline.
Short positions generate profits when stock values drop.
International stock markets fell for the third straight week, while bond yields increased due to concerns that ongoing conflict in Iran could maintain upward pressure on oil costs and trigger inflation.
Goldman Sachs reported that both index-tracking products such as ETFs and individual stocks experienced net selling. The majority of global market sectors saw more selling than buying activity, with consumer discretionary, technology, and financial sectors leading the decline.
Only two sectors attracted positive investment from hedge funds: consumer staples, which include essential weekly purchases, and energy stocks. These were the sole areas where funds maintained long positions, anticipating price increases.
The investment bank noted that hedge funds abandoned their long positions and increased short bets in Asian emerging markets.
Between March 13 and March 19, hedge fund stock selectors achieved a 0.47% performance gain, with many earning profits from their long-term investments, Goldman reported.
Despite this weekly gain, stock selectors have declined 3.85% throughout March, though they maintain a 0.16% positive return for the year.
Systematic stock traders profited from their short positions and have gained just over 6% for the year.
The report indicated that gross leverage, which measures hedge fund trading activity levels, decreased to 309.8% during the week.
