Tech Stock Selloff Amplifies Volatility, Some Fund Strategies' Year-to-Date Returns Nearly Wiped Out

Odaily reports that the ongoing slump in global tech stocks is pushing the hedge fund industry into a new round of adjustment. As AI-related trades reverse sharply, the global tech stock selloff has dealt a heavy blow to hedge funds, with some strategies' year-to-date returns nearly wiped out. Several large funds have begun cutting leverage and disbanding investment teams, with market concerns that concentrated unwinding could further amplify volatility.

Goldman Sachs data shows that equity long/short strategy funds focused primarily on tech stocks lost more than 4% in a single day on Thursday, bringing their year-to-date returns down to near zero. As recently as June this year, these funds had posted cumulative returns of as much as 24%.

The losses were not confined to tech-focused strategies. Goldman Sachs data shows that global fundamental equity long/short strategy funds fell an average of 1.3% on Thursday, while multi-strategy funds dropped 1.4%, reflecting that selling pressure is spreading to a broader range of portfolios.