Goldman: Hedge funds log biggest global equity shorts in 13 years

Goldman Sachs data show hedge funds posted their largest net short position in global equities in 13 years last month. Short sales outpaced long purchases 7.6 to 1, and about 76% of those shorts were in index and ETF products.

The figures cover hedge fund activity across major markets. In the United States, short interest in ETFs rose 17.2% from the prior month, led by large-cap equity funds.

Leverage moved in opposite directions. Gross leverage, which combines the value of long and short positions, climbed to a new high. Net leverage, which nets longs against shorts, declined.

Goldman's flow data also point to selling pressure in U.S. equities. Institutional investors sold $4.2 billion of U.S. stocks in one week, bringing seven-week cumulative flows to negative $17.7 billion. Single stocks saw $5.9 billion in outflows over the period.

The shift in positioning came amid heightened geopolitical tensions and increased uncertainty around corporate earnings and economic growth.

Short selling involves borrowing shares and selling them with the aim of buying them back later at a lower price. Leverage tracks how much market exposure funds carry relative to their capital.