Published by Jessica Weisman-Pitts
Posted on November 4, 2024
2 min readLast updated: January 29, 2026
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By Nell Mackenzie
LONDON (Reuters) – Hedge funds focused on European stock markets suffered their largest monthly losses in over a year in October, dragged down by a broader market sell off, according to a Goldman Sachs note sent to clients on Friday and seen by Reuters on Monday.
European stock pickers returned a negative 2.6% in October, their largest monthly loss since September 2023, Goldman Sachs said.
The region’s broadest index of European stocks fell 3.6% in October during the third-quarter earnings season, which has seen positive results from banks, pharmaceuticals and biotech companies offset by a drag from industrials and energy companies.
European stocks were sold broadly by all market participants, as global traders dumped their European holdings in favour of hoovering up U.S. equities ahead of the presidential elections, the note said.
Declining stock values in Europe knocked year-to-date returns for European traders down to 5%, less than half the 11.5% posted by U.S. stock pickers.
Losses mostly resulted from utilities stocks like gas, electric and water companies, Goldman said.
Industrial stocks and short positions, which bet on a fall in the value of a company’s shares, made money for some of the hedge funds, it added.
Stocks that experienced the biggest net selling were from hardware tech like semiconductor and semiconductor equipment companies, as well as the aerospace and defence sectors, the bank said.
Financial stocks, which typically include banks, were the most net-bought sector for a second month in a row, with hedge funds ditching short positions and adding long positions which bet on a rise in value, Goldman said, without giving a further breakdown.
European-focused fundamental stock pickers “substantially” decreased gross leverage in October, the bank said, while net leverage hit its lowest this year.
(Reporting by Nell Mackenzie; Editing by Kirsten Donovan)
A hedge fund is an investment fund that pools capital from accredited investors to invest in a variety of assets, often using complex strategies to achieve high returns.
A market sell-off refers to a rapid decline in the price of securities, often triggered by negative news or economic indicators, leading to panic selling among investors.
A long position is when an investor buys a security expecting its price to rise, while a short position involves selling a borrowed security expecting its price to fall.
Leverage in finance refers to the use of borrowed funds to increase the potential return on investment, but it also increases the risk of loss.
Utilities stocks are shares of companies that provide essential services such as water, electricity, and natural gas, typically characterized by stable earnings and dividends.
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