Hedge funds recorded their largest-ever one-day net sales of global equities following President Donald Trump’s sweeping announcement of new tariffs, according to a report by Bloomberg citing data from Goldman Sachs’ prime brokerage unit — marking a historic moment in hedge fund positioning.
Goldman’s data, which tracks institutional flows across regions and sectors, revealed that hedge fund managers aggressively reduced equity exposure across the board last week, with North American markets accounting for over 75% of the total net selling. The scale of the selloff — the biggest single-day drop since Goldman began tracking the data in 2010 — reflects rising macroeconomic uncertainty and heightened recession fears.
The selloff was not confined to long positions. Hedge funds sharply increased short bets across US macro products — including equity indices and ETFs — by 22% week-on-week, the largest increase in over a decade, according to Vincent Lin, co-head of prime insights and analytics at Goldman Sachs.
The rush to de-risk followed Trump’s decision to impose the steepest US tariffs in over a century, a move that has sent shockwaves through global markets and triggered a risk-off rotation across asset classes. With US equity valuations plunging to their lowest levels since early 2023 and the CBOE Volatility Index (VIX) spiking, hedge funds appear to be positioning for a prolonged period of market instability.
“I worry that post-2 April tariff announcement, it will be very difficult to ‘put the toothpaste back in the tube’ — even if progress is made on the negotiation front,” said John Flood, partner at Goldman Sachs, in a note to clients.
At the sector level, hedge funds were net sellers in 10 out of the 11 tracked S&P 500 industry groups, with the heaviest selling concentrated in information technology, consumer discretionary, healthcare and financials. The S&P 500 index suffered its worst weekly decline since March 2020, with all sectors ending in negative territory.
Goldman’s data was corroborated by JPMorgan’s prime brokerage team, which also reported intense deleveraging by hedge fund clients. However, JPMorgan noted that the pace of selling may be indicative of a tactical bottom approaching.
“The difficulty is that even if there is a near-term rebound, it’s not clear how long it will last as positioning could continue to trend lower over time,” said John Schlegel, JPMorgan’s head of positioning intelligence.
