Unlock Bulletin on White House Hour FREE
Your guide for what American choices 2024 means for Washington and the world
Hedge funds have reduced their bets to the shares and reduced their borrowings from banks as they fight to resolve the increase in volatility in the market launched by the global trade war of US President Donald Trump.
Sharp’s stock has been sold out in recent weeks due to concern about Trump’s tariffs, she has been particularly difficult to hit the sector. Goldman Sachs’ Hedge Industry VIP Index, which follows the most popular buying of funds, such as Ad Group ApplevinChipmaker Broadcom and Energy Group Vistra, crashed by 12.5 percent of February 19th-Kada S&P 500 hit a record-like comparison with a fall of 8.6 percent in the Blue Chip index.
As a result, Hedge Funds Managers have aggressively reduced the size of their bets with the influence, as they try to limit the losses, reducing the amount they borrow from banks to buy or bet against shares.
The reduction of gross position – a combination of bets and bets against shares – Hedge funds on Friday and Monday have been the largest in four years, according to the Goldman Sachs report and one of the largest in the last 15 years.
“There is a lot of pain there,” said the executive director of a large Hedge Fund. “The only way to defend yourself in the environment today is to reduce the impact.”
Among the funds affected during the volatility of the market is Millennium Izzy Englander, which manages the property of nearly $ 75 billion. Last week, until Thursday, she lost 1.4 percent, according to the person who saw numbers, because this year it has already fallen by 0.8 percent by the end of February.
The Hedge Fund Ken Griffin Citadel, which was $ 66 billion in assets, reduced 0.8 percent by the end of February this year, although Balyasny increased by 3.5 percent in its main fund.
Millennium and Citadel refused to comment.
Trump’s approach to tariffs to US trade partners has developed markets, while suppressing immigration and decrease in the public sector has led to fear that inflation can increase and can slow down GDP growth.
Vix, a so -called Wall Street scallop, which measures the market expectations of stock fluctuations, has increased at the highest level since August last year.
Three people who work in various Hedge funds of multiple managers-who use numerous traders’ teams, large amounts of influence and solid risk management-said that the reduction of positions are the largest they have seen since the end of 2018, when the markets have been abruptly sold out.
A quick reduction in the effects of Hedge funds by the multi-maker can lead to the supplies to fall more than otherwise, “increasing market moves,” Governor Bank of England said last month, Andrew Bailey.
Hedge funds managers say that the current environment has led to a more unstable market where it is harder to choose which stocks will do well or bad in the short term.
“[There has been a] The Shift paradigm, which means that different supplies will lead, change the value assessment, “said one executive director of multiple managers of Hedge Fund.
The shares in the most popular Hedge Fund Index Goldman Sachs began to surpass the most popular long positions, causing losses for managers.
The basic funds for long short capital lost on average almost 6 percent of February 18, according to Goldman Sachs, which was seen by FT. On the rolling of 14-day, this indicates the highest loss from the top to the spending of funds from May 2022.
“These policy changes were massive and fast,” said one executive director. “It’s a different environment now. We’ve never seen it.”
