Hedge Funds Dump U.S. Stocks at Fastest Pace Since Liberation Day
Nashnova编辑部
Goldman Sachs Prime Brokerage reports hedge funds sold US equities this week at the fastest pace since Liberation Day (April 2), with long and short sides selling in tandem; net leverage fell to a one-year low, signaling a sharp contraction in risk appetite across the hedge-fund complex.
How much was sold — and how?
Macro products (indices and ETFs) accounted for 47% of total net selling, at a -1.4 standard-deviation intensity; single stocks made up 53%, at -1.5 standard deviations. This means → funds were not just trimming one leg — both single-name and macro books were cut simultaneously.
The long-to-short selling ratio on macro products was roughly 1.2:1; on single stocks the ratio was roughly even. In plain terms = funds reduced bullish bets and added bearish ones at the same time — a very consistent de-risking signal.
What does the leverage data reveal?
US long/short fund gross leverage edged up 1.5 pp to 205% (11th percentile over one year), but net leverage dropped 3.0 pp to 48.3% — a one-year low and the largest single-week decline in five months.
This means → funds did not slash total position size dramatically; instead they crushed directional exposure — gross leverage stayed, but longs and shorts nearly offset each other.
The long/short ratio (market-cap basis) fell to 1.617, sitting at the 4th percentile over one year. This reflects confidence in market direction near its lowest point in twelve months.
Which sectors were hit hardest?
Nine out of eleven sectors saw net selling. By dollar volume, information technology led (deviation of -1.1 standard deviations), with selling driven almost entirely by long liquidation — tech ETFs, electronic equipment, and tech hardware bore the brunt.
Yet over the past month IT has still been net bought; current net exposure is 16.6% of total US net market value (25th percentile, one year). In plain terms = this week's selling was fierce, but prior buying was larger — the position is not yet at rock bottom.
The only two net-bought sectors were energy and consumer discretionary.
Why were utilities sold the hardest of all?
Utilities posted the most extreme net selling on a standard-deviation basis: -2.5 standard deviations (one year). Funds were net sellers of utility and real-estate stocks every single day this week.
This means → rising long-end Treasury yields undercut "bond proxies" — stocks investors hold mainly for their stable dividends, much like holding a bond. The higher rates go, the less attractive those dividends look.
Selling was driven primarily by new short positions. Electric utilities, multi-utilities, and independent power producers led; net exposure now sits at just 2.6% of total US net market value (8th percentile, one year).
What does Morgan Stanley's data say?
Morgan Stanley Prime Brokerage data corroborates Goldman's: funds were global net sellers of equities this week, the second-largest supply week in twelve months.
Non-US stocks bore the heaviest selling, led by Asia-Pacific — exposure to Japan, China, South Korea, and Taiwan was all trimmed. Europe and North America saw comparatively lighter selling.
This reflects a worldwide, synchronized de-risking — not a US-only event.
What matters next?
Net leverage at a one-year low, combined with synchronized global de-risking, signals that hedge-fund risk appetite has contracted markedly.
Whether funds rebuild long positions depends on two variables: whether long-end rates stabilize or retreat, and whether consumer data provides fresh growth support.
In plain terms = funds have lifted their foot off the gas and moved it to the brake. To hit the accelerator again, they need to see rates stop climbing and the economy holding up.
Content is for reference only, not financial advice.