GOLDMAN SACHS: THE BIGGEST MONTHLY RETREAT IN ASIA'S EQUITY HEDGE FUNDS SINCE THE AI CONCEPT FELL

ON 30 JULY, A GOLDMAN SACHS REPORT INDICATED THAT EQUITY HEDGE FUNDS FOCUSED ON THE ASIAN MARKET WERE FACING THE LARGEST ONE-MONTH WITHDRAWAL SINCE RECORD TIME, OWING TO THE WIDE-SCALE SALE OF THE AI CONCEPT EQUITY UNIT, WHICH WIPED OUT MOST OF THE GAINS FROM THE PREVIOUS MARKET CONCENTRATION ON THE BLOCK. ACCORDING TO GOLDMAN SACHS, AS OF 28 JULY, THE AVERAGE NUMBER OF EQUITY HEDGE FUNDS FOCUSED ON THE ASIAN MARKET HAD FALLEN BY 18.6 PER CENT THIS MONTH. IN THE FIRST HALF OF THIS YEAR, SUCH FUNDS BECAME ONE OF THE BEST PERFORMERS OF THE WORLD BY PRE-ALIGNING THE AL HARDWARE HEAD, INCLUDING THE KOREAN CHIP MANUFACTURER SK HERCULES AND SAMSUNG ELECTRONICS. SOME OF THE FUNDS HAD A RETURN OF OVER 100 PER CENT AT ONE TIME. HOWEVER, THE MARKET HAS NOW EXPERIENCED A SHARP REVERSAL. GOLDMAN SACHS INDICATED THAT SINCE THE PEAK RATE OF RETURN REACHED 40 PER CENT IN THE YEAR OF 22 JULY, SUCH FUNDS HAD RECOVERED 21 PERCENTAGE POINTS IN THE YEAR. ACCORDING TO GOLDMAN SACHS, THE CROWDED AI DEAL, WHICH PUSHED THE FUND UP SHARPLY IN THE FIRST HALF OF THE YEAR, IS NOW BECOMING “A MAJOR FACTOR DRIVING AN EXTRAORDINARY INCREASE IN WITHDRAWALS THIS MONTH”. AMONG THEM, THE HIGHER THE AI THEMATIC EXPOSURE, THE GREATER THE LOSSES. IN THE FACE OF VOLATILE MARKETS, HEDGE FUNDS HAVE BENEFITED AND REDUCED RISK. GOLDMAN SACHS DATA SHOW THAT, AS AT 27 JULY, HEDGE FUNDS IN ASIA HAD CUT THEIR EXPOSURES IN EIGHT CONSECUTIVE TRADING DAYS, WITH “FIVE-DAY CUMULATIVE TOTAL” REDUCTIONS AT AN ALL-TIME HIGH。