Global hedge funds have sharply increased net selling of emerging Asian stocks, focusing on Taiwan, South Korea, and India, as geopolitical risks escalate and sector-specific vulnerabilities heighten market volatility, according to Goldman Sachs.
Global hedge funds stepped up net selling of emerging Asia equities last week at levels not seen since April 2025, driven by a spike in risk aversion as geopolitical tensions intensified, according to a Goldman Sachs client note seen by Reuters.
The prime brokerage report, which tracked flows through Thursday, March 19, said the activity was largely driven by short-selling and was focused on Taiwan, South Korea and India, while short interest in Chinese shares remained comparatively muted. The note added that, as the Iran conflict escalated, funds trimmed positions across all major regions, with North America and emerging Asia leading net dollar withdrawals. Despite the recent pullback, Goldman’s data show hedge fund exposure to emerging Asian markets still sits near record highs.
The latest reallocation comes after a period of extraordinary demand for semiconductor-related names. Investors had crowded into stocks such as Samsung Electronics, SK Hynix and Taiwan Semiconductor Manufacturing Co on expectations of robust artificial intelligence-driven chip demand, making Korea and Taiwan among the best-performing markets so far this year. That concentration left those markets vulnerable: Taiwan’s benchmark index plunged about 5% and South Korean shares fell roughly 3% in early trade on Monday following an exchange of threats between the United States and Iran, amplifying risk-off flows.
The pattern mirrors earlier episodes of rapid hedge fund repositioning. Goldman analysis published in mid‑2024 flagged aggressive selling of US technology and semiconductor stocks, while another mid‑2024 prime brokerage summary noted increased dispositions in financials as growth concerns mounted. In October 2024, Goldman reported a sharp unwinding of Chinese positions after policy meetings disappointed traders, underlining how sentiment and policy signals have repeatedly prompted swift exits from concentrated bets.
Yet markets have also seen brisk rotations into Asia this year. According to a Goldman client note cited in February 2026, funds briefly amassed record purchases of both developed and emerging Asian equities, a reminder that flows can reverse quickly when risk appetite returns. Analysts say that such reversals can amplify volatility in the region because large hedge fund allocations concentrate trading in a small number of high‑beta names.
Market participants caution that uncertainty around geopolitics and policy will continue to dictate positioning. Industry observers point out that high exposure levels leave portfolios susceptible to rapid de‑risking, while the heavy weighting of semiconductor and technology firms in Korea and Taiwan means those indices may see outsized moves on shifts in global risk sentiment or demand forecasts.
The Goldman note, as reported by Reuters, provides a snapshot of a market in which large, concentrated bets and sudden geopolitical developments are producing swift, often asymmetric flows. Fund managers and prime brokers will be watching both headline risks and sector‑level signals for signs of whether the recent selling marks a temporary correction or the start of a broader rearmouring of portfolios away from emerging Asia.
- https://www.zawya.com/en/capital-markets/equities/hedge-funds-selling-of-emerging-asian-market-stocks-last-week-was-most-in-a-year-says-goldman-yar4vf9m – Please view link – unable to able to access data
- https://www.zawya.com/en/capital-markets/equities/hedge-funds-selling-of-emerging-asian-market-stocks-last-week-was-most-in-a-year-says-goldman-yar4vf9m – Global hedge funds’ selling of emerging Asia market stocks last week was the most since April 2025 amid heightened risk aversion, according to a Goldman Sachs client note seen by Reuters. The selloff, which was mainly short-selling, was concentrated in Taiwan, Korea, and India, while short-selling of China stocks was relatively mild. As the Iran war intensified, all major regions were net sold, led in dollar terms by North America and emerging Asian markets. Even so, global hedge funds’ exposure to emerging Asian markets remains around record highs. Korea and Taiwan are among the world’s top-performing markets so far this year, as investors piled into semiconductor-related stocks including Samsung Electronics, SK Hynix, and TSMC, betting on the surging artificial intelligence demand. Taiwan’s benchmark index slumped 5% and Korean stocks fell 3% in early trade on Monday after the United States and Iran traded escalating threats.
- https://www.bloomberg.com/news/articles/2024-06-27/hedge-funds-are-selling-tech-stocks-aggressively-goldman-says – In June 2024, hedge funds were ‘aggressively’ selling tech stocks, according to analysis from Goldman Sachs Group Inc. This month’s net selling in the US tech sector was on track to be the largest on record since 2017. Semiconductor and semiconductor equipment stocks were the most offloaded by hedge funds, followed by software and internet stocks. ([bloomberg.com](https://www.bloomberg.com/news/articles/2024-06-27/hedge-funds-are-selling-tech-stocks-aggressively-goldman-says?utm_source=openai))
- https://www.bloomberg.com/news/articles/2024-05-13/hedge-funds-sell-financials-as-economic-outlook-sours – In May 2024, hedge funds increased their selling of financial stocks as US economic growth showed signs of weakness. Data compiled by Goldman Sachs Group Inc.’s prime brokerage desk indicated that funds net sold for the third consecutive week, marking the largest bout of net selling in two months. Capital markets, financial services, and insurance were among the worst-hit subsectors, with every area, excluding mortgage REITs, net sold over the period. ([bloomberg.com](https://www.bloomberg.com/news/articles/2024-05-13/hedge-funds-sell-financials-as-economic-outlook-sours?utm_source=openai))
- https://www.bloomberg.com/news/articles/2024-10-10/hedge-funds-sold-record-chinese-stocks-on-tuesday-goldman-says – In October 2024, hedge funds sold a record amount of Chinese shares after a key policy meeting disappointed traders with no major stimulus, according to a Goldman Sachs Group Inc. trader note. Hedge funds not only unwound their long positions but also added shorts to their books, with long sells being double the amount of short sells. ([bloomberg.com](https://www.bloomberg.com/news/articles/2024-10-10/hedge-funds-sold-record-chinese-stocks-on-tuesday-goldman-says?utm_source=openai))
- https://www.asianfin.com/articles/93151 – In October 2024, Goldman Sachs reported that hedge funds had significantly reduced their exposure to Chinese and other emerging market stocks, opting instead to increase their positions in U.S. equities amid market rotation ahead of the U.S. election. The firm’s prime brokerage team estimated that hedge funds had reversed nearly 80% of their peak cumulative buying in Chinese equities as of October 23. The pullback from China was attributed to concerns over a lack of details regarding Beijing’s anticipated stimulus measures and potential tariff risks associated with a Donald Trump presidency. ([asianfin.com](https://www.asianfin.com/articles/93151?utm_source=openai))
- https://www.investing.com/news/stock-market-news/hedge-funds-buy-a-record-amount-of-asia-equities-says-goldman-4507628 – In February 2026, global hedge funds bought a record amount of stock from developed and emerging markets in Asia, according to a Goldman Sachs client note. The trades wagered stock prices would rise, particularly in emerging markets in Asia. Over the week, several stock markets in Asia posted positive returns, with Japan’s Nikkei and Taiwan’s stock indices both gaining around 5%, and the Korean Kospi adding over 8% during the trading period. ([investing.com](https://www.investing.com/news/stock-market-news/hedge-funds-buy-a-record-amount-of-asia-equities-says-goldman-4507628?utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The article references a Goldman Sachs client note dated March 19, 2026, indicating recent hedge fund activity. However, similar reports from mid-2024 and February 2026 suggest that this narrative may not be entirely new. The presence of earlier reports with different figures and dates raises concerns about the originality and freshness of the content. Additionally, the article includes updated data but recycles older material, which further diminishes its freshness. Given these factors, the freshness score is reduced.
Quotes check
Score:
6
Notes:
The article includes direct quotes attributed to a Goldman Sachs client note. However, without access to the original Goldman Sachs document, the accuracy and context of these quotes cannot be independently verified. The reliance on unverified quotes from a proprietary source raises concerns about the credibility of the information presented. Therefore, the quotes check score is reduced.
Source reliability
Score:
5
Notes:
The article cites a Goldman Sachs client note, which is a primary source. However, the lack of independent verification and the potential for bias in proprietary reports from financial institutions necessitate a cautious approach. The absence of corroborating information from other reputable news organizations further diminishes the source’s reliability. Consequently, the source reliability score is reduced.
Plausibility check
Score:
7
Notes:
The claims about hedge funds increasing net selling of emerging Asian equities align with known market behaviors during periods of heightened geopolitical tensions. However, the lack of independent verification and the presence of similar reports from previous periods suggest that the current narrative may not be entirely accurate or original. Therefore, the plausibility score is moderate.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article’s reliance on unverified quotes from a proprietary Goldman Sachs client note, coupled with the lack of independent verification and the presence of similar reports from previous periods, raises significant concerns about its credibility and originality. The freshness and source reliability scores are notably low, indicating potential issues with the content’s authenticity and timeliness. Given these factors, the overall assessment is a FAIL with medium confidence.