HEDGE FLOW Systematic hedge funds hit with daily losses in October, says Goldman Sachs
1. Systematic hedge funds are experiencing daily losses since early October. 2. Goldman Sachs notes this downturn, which may reflect broader market trends.
FAQ
Why Neutral?
The losses incurred by hedge funds may not directly affect GS but indicate market stress, reminiscent of the 2018 volatility. Historical downturns often lead to caution in trading strategies, but do not necessarily translate to negative valuations for GS.
How important is it?
The losses by hedge funds might indicate threshold market conditions affecting overall stability, which GS monitors closely. A cautious approach from institutional investors may impact GS’s trading volumes and, in turn, affect liquidity.
Why Short Term?
Hedge fund performance can rapidly change based on market conditions, thus the short-term focus. As seen in previous market cycles, hedge fund performance often mirrors short-term market volatility.