Global hedge funds incurred notable losses during the current week, affected by a broad wave of selling that hit technology and artificial intelligence company stocks, amid growing concerns about the ability of massive investments in this sector to generate quick returns.
The international "Euronext" exchange website published on Friday data prepared by the American Goldman Sachs investment and financial services group, showing that global equity funds operating under long-short strategies recorded consecutive daily losses throughout the week, reaching 2.9% during the period ending on October 15.
Funds specialized in Asian markets and the technology sector led the decline wave, with Asia-focused funds dropping by 2.6%, while technology funds lost approximately 2%. Other investment strategies, including multi-strategy and systematic funds, were also subjected to similar pressures.
The losses coincided with the release of US inflation data that exceeded expectations, strengthening market bets on the continuation of tight monetary policy and leading to strong pressure on semiconductor company stocks and AI supply chains.
Hedge funds are private, pooled investment funds managed by professional managers aiming to achieve high returns exceeding the market average regardless of its direction. They are considered among the institutions most affected by market shifts due to their reliance on financial leverage and active trading strategies in global markets.
AI and semiconductor stocks had led a strong upward wave in global markets over the past two years, driven by massive investments in computing infrastructure and advanced chips. However, rising capital expenditure and higher interest rates raised questions about the speed of achieving expected returns, prompting investors to reconsider the high valuation levels of technology companies.
Source: Syrian Arab News Agency (SANA)
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