Systematic hedge funds have endured one of their toughest starts to a month in nearly two years, with daily losses recorded across the first week of October, according to a report by Reuters citing a client note from Goldman Sachs.

Quantitative strategies – which trade using algorithms designed to exploit market trends and signals rather than company fundamentals – are down roughly 1.8% month-to-date, Goldman said. The selloff reflects a crowded unwind, as managers simultaneously reduced exposure across similar trades, exacerbating losses on both long and short positions.

Despite the setback, systematic funds remain up around 11% year-to-date, buoyed by strong performance earlier in 2025. Goldman attributed the latest drawdown primarily to the “short leg” of trades in the US and Europe — positions betting on falling asset prices that turned against funds as broader markets, including the S&P 500 and Nasdaq, reached record highs.