Global hedge funds stepped up selling of emerging Asian equities last week at a pace Goldman Sachs describes as the largest since April 2025, according to a Goldman Sachs prime brokerage client note. The selloff was dominated by short-selling activity and was concentrated in Taiwan, Korea and India, while short interest in China stocks was comparatively limited.
The note, which tracked activity for the week ending Thursday, March 19, highlighted that heightened risk aversion accompanied an intensification of the Iran war, a backdrop that coincided with net selling across all major regions. In dollar terms, North America and emerging Asian markets were the largest net sold regions.
Despite the recent selling pressure, the note said that global hedge funds' overall exposure to emerging Asian markets remains around record highs, underscoring that the tactical reduction in holdings has not materially erased large accumulated positions.
The report also pointed to a contrast between recent market leaders and the areas hit by the selling. Korea and Taiwan have been among the strongest markets year-to-date, supported by heavy investor interest in semiconductor-related names including Samsung Electronics, SK Hynix and TSMC as investors positioned for rising artificial intelligence demand. That earlier strength gave way to volatility after geopolitical tensions escalated - Taiwan's benchmark index dropped 5% and Korean shares fell 3% in early trading on Monday following an exchange of escalating threats between the United States and Iran.
Embedded within the reporting was a market question directed at individual investors: "Should you be buying 000660 right now?" Promotional copy accompanying that question described an AI-driven stock idea tool that evaluates 000660 and other companies using more than 100 financial metrics, and noted past notable winners it identified. The description framed the AI as an objective screening tool that highlights stocks with attractive risk-reward profiles, citing historical examples of large gains for specific names.
Context and implications
The Goldman prime brokerage note portrays last week's activity as primarily defensive and tactical - heavy short-selling in select emerging Asian markets amid a broader risk-off mood. While the selling was sizable relative to the past year, the note emphasizes that hedge fund positioning remains heavily exposed to the region overall.