A broader investor sentiment indicator from the bank fell to the 46th percentile, its lowest level since April. Market participants are currently shifting capital into bonds, gold, and the yen, while momentum ETFs saw $5.1 billion in September outflows. Retail buyers have not yet meaningfully stepped in to offset the selling pressure, particularly among high beta assets.
Tuesday, October 20, 2026
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Goldman Sachs Warns of High Volatility as Hedge Fund Net Position Hits 0th Percentile
US Markets2 days ago
Hedge fund net leverage fell to 43.7%, the largest weekly decline since April 2025, which could amplify market swings if sentiment shifts. Goldman Sachs reports that net positioning for these funds has reached the 0th percentile over both one year and five year periods, indicating an extreme defensive posture. While these funds have reduced long positions and increased shorts, gross leverage remains elevated at the 90th percentile over the last five years, meaning hedge funds have not fully exited the market.
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