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Hedge Funds Slashing Equity Exposure at Fastest Pace Since 2014

  • ETF tracking hedge-fund darlings falls most since September
  • VIX spikes, causing pain for funds betting on market calm
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Hedge funds are slashing their stock exposure at the fastest rate in more than six years as a wave of volatility tied to some of their most-prominent bets forced a retreat from the market.

Fund managers covered their money-losing short sales while trimming bullish bets for a fourth straight session Tuesday. Over that stretch, their total outflows from the market reached the highest level since October 2014, data compiled by Goldman Sachs Group Inc.’s prime-brokerage unit show.