Hedge Funds Sell Global Stocks at Fastest Pace Since April

Hedge funds pushed their global equity selloff to the most aggressive pace since the April 2025 tariff shock, cutting positions for a sixth consecutive week through March 26 in a move dominated by new short bets rather than simple long liquidation, according to Goldman Sachs Prime Services data compiled by Vincent Lin's team.

The mechanics of the latest week set it apart: short sales outpaced long buying by a ratio of 5.6 to 1. That is not the signature of orderly portfolio rotation. It is a directional pile-on, with funds actively building bearish exposure across both macro products and single stocks simultaneously. All major regions were net sold, with North America and Europe leading in dollar terms.

Europe's positioning stands out as the starkest signal. Short exposure in macro products, the index-level and thematic instruments that trade broad economic themes rather than individual names, hit 11% of overall book, a 10-year high. That reading means European macro short books are now more stretched than at any point since 2016, and it carries a mechanical consequence: the larger the short base, the more violent the potential unwind if sentiment shifts.

Goldman traders flagged exactly that risk. In a note on U.S. positioning, the prime desk wrote that "some signs of capitulation are starting to emerge." Goldman's Brian Garrett was more direct about the macro variable driving the calculus, writing in a client note that the Iran war timeline is the central unknown: "Feels like we're closer to an end than the beginning, but also feels like we're playing a game that doesn't have 'innings' in the classic sense." His point is practical. A de-escalation headline, even a partial one, hits this positioning structure like a coiled spring. The combination of record short books and systematic selling that has been running for six weeks creates the fuel for a sharp snapback.

For desks and portfolio managers managing near-term risk, three instruments are worth tracking closely. Volatility surfaces will be the first to reprice if any war-related catalyst materializes, given the compressed positioning. Credit spreads, which have widened alongside the equity drawdown, will confirm or deny whether institutional risk appetite is genuinely resetting or just hedging temporarily. Mega-cap flow data from Goldman's own prime book will reveal whether the selling eventually migrates to the large-cap stocks that still carry the heaviest hedge fund long exposure globally.

For Goldman's own prime brokerage unit, the sustained activity is a revenue event. Six straight weeks of elevated gross trading across global book means higher commissions and wider spread capture regardless of direction. That is a different conversation than the P&L implications facing the long/short equity funds generating those flows. For them, the S&P financials index is down more than 11% this year, European banks have shed roughly 8%, and the question on every morning call is the same: whether this is the week that capitulation becomes a floor.