Hedge Funds Give Up Half of 2025 Gains in 'Challenging' Markets, Says Goldman Sachs
Hedge fund stock pickers and multi-strategy funds experienced a significant setback, relinquishing approximately half of their average yearly gains amid a tech-driven equity selloff, as noted by Goldman Sachs. The downturn was particularly severe in sectors where hedge funds had concentrated long positions, such as technology and media, resulting in an average return of just 1% for stock pickers so far this year. This performance marks one of the most challenging periods for hedge funds, with many strategies failing to offset losses as anticipated.
- The current struggles of hedge funds highlight the volatility inherent in relying on concentrated positions in high-growth sectors, emphasizing the need for diversification in investment strategies.
- What long-term changes might hedge funds consider in their strategies to mitigate risks in such unpredictable market conditions?