Morgan Stanley’s hedge fund clients showed a similar pattern of risk reduction, albeit at a slower pace. Their de-grossing activity for the week was the largest this year. At Goldman Sachs Group Inc., fund clients pared positions in 12 of the past 14 sessions.
For stock-picking hedge funds coping with 2023’s loopy markets, risks are starting to outweigh the rewards.
Pro managers who make both bullish and bearish equity wagers last week slashed positions on both sides of their book, also known as de-grossing, according to data compiled by JPMorgan Chase & Co.’s prime brokerage unit. The rush to tweak positions was frantic enough to push total client stock flows to the highest level since the retail-fomented short squeeze in 2021.
