HedgeCo.Net — Global fundamental long-short hedge funds lost money on every trading day of the week to October 15, ending the period down 2.9% as a broad unwind of artificial-intelligence trades swept through equity books, according to Goldman Sachs prime brokerage data reported by Reuters and The Economic Times. The strategy remains up 14.3% for the year to date, the data showed, but the speed of the reversal has put crowding back at the center of risk discussions.
Asia-focused managers took the heaviest damage. In one session during the week, Asia-focused stock pickers fell 2.6% and technology-focused funds 2.0%, while global stock pickers lost 0.9% and systematic long-short and multi-strategy funds each declined roughly 1%. Asia-focused stock pickers were down 6.8% for the first half of October, erasing more than half of the gains built since a late-June peak, when they were up more than 40% for the year, Reuters reported citing Goldman. South Korea’s KOSPI fell more than 7% on October 15, Yonhap reported, and Taiwanese equities dropped more than 3%.
Goldman said the selling was dominated by long liquidation rather than new shorts. A Goldman Prime Insights report cited by Yonhap Infomax said hedge funds net sold the bank’s Global AI Basket of roughly 100 semiconductor, data-center, cloud and power names for five straight sessions from October 8 to 14, reversing net buying accumulated since early last year, with proceeds rotated into healthcare and consumer staples. By Friday, Goldman told clients AI stocks had been net sold for six consecutive sessions, according to Reuters.
The breadth of the drawdown is the detail allocators should note. From Covid through the end of 2025, Goldman said, fundamental equity long-short, systematic and multi-strategy books never fell more than 80 basis points on the same day; that has now happened three times in 2026, on February 4, July 28 and October 15. “The interesting thing about this selloff is that it exposes just how much of the hedge fund industry has effectively been trading the same underlying theme, even when portfolios look very different on paper,” Bruno Schneller of Erlen Capital Management said in comments reported by Reuters.
The macro trigger was a hotter-than-expected U.S. inflation reading that revived expectations of further rate increases and hit the most capital-intensive parts of the AI complex. For investors in multi-manager and long-short funds, the episode is a reminder to look through strategy labels to factor and theme exposure, and to ask managers how much gross they cut this month and at what cost.