Hedge Funds
Hedge funds cut tech at the fastest rate in Goldman's prime data since 2016
Goldman Sachs prime brokerage figures show managers shed technology stocks at a record clip in the five sessions to 15 October, taking net leverage to a one-year low.
HedgeWeekly Hedge Fund Desk ·
Hedge fund clients of Goldman Sachs trimmed their technology positions by the biggest percentage in the bank's prime brokerage records, which start in 2016, over the five trading sessions to 15 October, according to a Goldman prime desk note reported by Investing.com and other outlets. Investing.com described it as the quickest pace of tech reduction in at least ten years.
The retreat coincided with a sharp drop in AI-related shares. The Nasdaq 100 lost 5.5% in the week to 16 October, its weakest week since April 2025. Within tech, chipmakers accounted for the most selling in dollar terms, and gross exposure to the sector was cut by more than in any week for two months. Across global equities, net selling reached roughly two standard deviations above the average weekly flow of the past year.
Managers also traded less and took risk off more generally. Overall gross trading activity in Goldman's book contracted at the quickest rate in almost three months, while net leverage dropped to 48.6%, the lowest reading in a year, as long holdings shrank relative to short positions.
Why it matters: the de-risking has not left funds underweight. Technology still makes up a 23.5% net allocation in Goldman's global prime book, which ranks around the 90th percentile of the past five years. For allocators, that means many equity long/short and multi-strategy portfolios remain heavily tied to tech and semiconductor moves, so further volatility in the AI trade could still feed through to manager returns.