Investing.com — Hedge funds have significantly reduced their exposure to European equities during October’s heightened market volatility, according to ’ Prime desk.
The funds are unwinding long positions and covering shorts, primarily in individual stocks. Multi-manager hedge funds are leading this reduction in gross exposure, Goldman Sachs noted.
“Across countries, we saw notable net buying in Swiss equities and sizable net selling in French equities amid political stress,” prime services strategists Kartik Singhal, Marco Laicini and Tanya Ratra wrote in a note to clients.
In terms of sector activity, hedge funds have been selling automotive stocks, reducing positions in defense companies, taking profits in pharmaceuticals, and buying basic resources stocks.
The strategists also pointed out that despite recent positive earnings reports, hedge funds remain “reluctant to add net exposure to luxury goods.”
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