Global stock-picking hedge funds lost 2.9% through Oct. 15 after daily declines, Goldman Sachs said, while Asia-focused stock pickers shed 6.8% amid an AI selloff.
Key Points:
- Global stock-picking funds lost 2.9% in the week through Oct. 15 but remained up 14.3% this year.
- Asia-focused managers lost 6.8% in the first half of October amid sharp semiconductor declines.
- Inflation, borrowing costs and questions about AI investment returns added to the pressure.
Goldman Sachs Report
The figures came from a Goldman Sachs prime brokerage note cited by Reuters on Oct. 16. The decline hit fundamental long-short equity funds, which try to profit from rising shares while betting against others, although the group remained up 14.3% for the year.
Wednesday brought another bruising session. Global stock pickers lost 0.9%, while Asia-focused managers fell 2.6% and technology funds declined 2.0%. Systematic long-short and multi-strategy funds each retreated about 1%.
The damage was particularly severe in semiconductor-heavy Asian markets, where South Korea's KOSPI tumbled 8% Thursday to a six-month low and Taiwan stocks lost more than 3%. Asia-focused stock pickers fell 6.8% in the first half of October, giving back more than half of their gains from a late-June peak.
Goldman linked the wider retreat partly to hotter-than-expected U.S. inflation data, which increased expectations for further interest rate hikes. Investors also questioned whether enormous spending on AI infrastructure would generate returns quickly enough to justify its costs.
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AI Investment Risks
The retreat exposed a common risk across strategies. Even managers who hedge their stock bets can suffer when positions tied to the same sector decline together. But the weekly slide has not erased global stock pickers' gains for 2026.
Damien Boey, a portfolio strategist at Wilson Asset Management, told Reuters on Oct. 13 that volatile bond yields were affecting asset prices more broadly. He suggested AI spending could slow and some companies could suffer, without forecasting a collapse across the industry.
BlackRock's research arm lowered its outlook on U.S. stocks to neutral this week, citing possible volatility around AI infrastructure spending. It favored short-term Treasuries.
The International Monetary Fund warned Oct. 13 that an AI market correction could have global consequences.
Goldman said all three major strategies lost more than 0.8% on Feb. 4, Jul. 28 and Oct. 15 this year. From the pandemic through the end of 2025, the bank recorded no session when the three strategies suffered declines of that size together.
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