Hedge funds continued to pare back equity positions for the sixth straight week through March 26, according to data compiled by the Goldman Sachs Prime Trading desk.
The reduction in overall holdings was led by increased short selling, the Goldman team reported, though managers also pared some long positions. The desk noted that the pattern of selling was broad-based.
All major geographic regions were net sold during the period, and the flow extended across product types: both macro products and single-stock positions recorded net outflows, the team led by Vincent Lin wrote in their weekly recap.
"Some signs of capitulation are starting to emerge," the Goldman team said in a separate note addressing hedge funds' exposure to US markets.
On a trailing six-week basis, the level of net selling in US exposure stood out as particularly large, ranking as the third-largest such selling episode over the past decade, according to Goldman. The firm cautioned that while current selling has climbed toward the intensity observed during the Covid selloff, it has not reached the levels recorded during last year's "Liberation Day" episode.
The report highlighted Europe as an area of concentrated short positioning. Short exposure in macro products across the region reached 11%, which Goldman characterized as a 10-year high.
Overall, the desk's notes portray a market environment where hedge funds are favoring shorting activity amid broader reductions in bets across regions and instruments. The account emphasizes the breadth of selling rather than concentrated moves in any single market segment.
Contextual summary: Goldman Sachs Prime Trading desk data through March 26 show consecutive weekly reductions in hedge fund global equity holdings, driven primarily by shorts, with broad-based net selling across regions, macro products and single stocks. European macro short exposure reached 11%, a 10-year high. US trailing six-week net selling ranked as the third-largest in the past decade, and Goldman noted emerging signs of capitulation while current selling remains below last year’s "Liberation Day" peak but is approaching Covid selloff levels.