Hedge funds significantly reduced their bullish and bearish positions across Asia on Monday, following similar moves in the US and Europe last Friday, according to a note from Goldman Sachs Group Inc. The bank reported the largest decline in hedge fund positions in Asia in four years, although it did not specify the assets involved.
The majority of the reduction—around 75%—occurred in developed markets, primarily driven by Japan. Hedge funds in the region quickly covered short positions and liquidated long holdings, the note stated. In emerging markets, China accounted for the majority of the reductions, with hedge funds scaling back their bullish bets.
This shift in Asia came after a record-breaking two-day decrease in global positions held by Goldman Sachs’s hedge fund clients, marking the largest reduction in four years.
Despite these declines, regional markets in Asia continue to see positive inflows this year, including both long and short positions. Last month’s surge in Asia-focused positions was particularly notable, the bank added.
Fundamental long-short managers focusing on Asia have shown a modest gain, up 0.9% month-to-date and 4% year-to-date. China-based managers performed particularly well, with an average gain of 1.4% this month and 6.9% this year.
In contrast, global long-short managers have faced setbacks, down 3% in March alone, extending the decline that began in mid-February. Overall, these managers are down an estimated 1% for the year, Goldman Sachs noted.
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