Equity Hedge Funds See Biggest Pullback in Over a Decade as More Than Half Lose Money

Equity hedge funds face a major October pullback, with more than half of 46 Bloomberg-tracked funds reporting losses.

Equity hedge funds recorded their sharpest retreat in more than a decade in October, with more than half of 46 major funds tracked by Bloomberg ending the month with losses. The pullback came even as the S&P 500 and Nasdaq remained in positive territory.

Data shared by Coin Bureau highlights a contrast between the performance of major U.S. stock indexes and the positioning of equity hedge funds. While both indexes stayed in the green during October, more than half of the tracked funds finished the month in negative territory.

Morgan Stanley Reports Sharp Cuts to Stock Positions

Morgan Stanley said equity hedge funds made their largest active reductions in stock positions last month in more than a decade. The scale of those cuts points to a significant shift in portfolio positioning during October, although the information shared by Coin Bureau did not specify the stocks or sectors most affected.

The reported reductions also occurred against a backdrop of gains in the broader U.S. equity market. The S&P 500 and Nasdaq both remained positive for October, showing that hedge fund performance and positioning did not move in line with the headline indexes.

More Than Half of Tracked Funds End October in the Red

According to the figures cited by Coin Bureau, more than 23 of the 46 major equity hedge funds tracked by Bloomberg posted negative returns for October. The source did not provide the individual performance figures or identify every fund included in the group.

Coin Bureau also introduced a reference to October returns among hedge funds facing large investor redemptions or shutting down teams, but the accompanying performance figures were not included in the available post. No individual fund names or return percentages were provided.

The available figures therefore establish the scale of the October pullback and the unusually large reductions in stock exposure reported by Morgan Stanley, but do not provide enough detail to compare the performance of individual hedge funds.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.