Hedge funds sharply reduced their exposure to consumer discretionary stocks last week, cutting positions in hotels, restaurants, and leisure groups to levels not seen since the 2020 pandemic, according to a report by Reuters citing a note from Goldman Sachs.
The data, seen by Reuters, revealed that consumer discretionary names were the most net-sold sector globally and in the US, as funds unwound long bets and added shorts amid mounting concerns over the economic outlook.
The shift marks a sharp decline in optimism about consumer resilience, with Goldman noting that hedge funds have now reached their lowest allocation to the sector in five years. The move follows weak US jobs data and a slump in consumer sentiment tied to the prolonged government shutdown.
In contrast, hedge funds increased exposure to healthcare stocks for an eighth straight week, the longest buying streak in nine months. Goldman said the renewed interest was driven by long positions in defensive names and specialist healthcare-focused hedge funds.
