Déjà Vu? Hedge funds make bold moves not seen since the COVID market crash; what's behind the shift? Here's what you need to know

Hedge funds are making extreme moves that are beginning to look similar to the opening phases of the COVID-19 crisis, as per a report.

A Repeat of March 2020?

Professional fund managers are selling individual stocks at the quickest rate in years, as recession fears and continued tariff uncertainty create shockwaves on the market, Daily Mail reported.

Over the last few days, hedge funds have cut their positions by a hefty amount just like they did in March 2020, when the pandemic had devastated global markets, according to the report.
Goldman Sachs analysts claimed that, «Some of their activity is comparable to March 2020, when portfolio managers cut their exposure to the stock market as the Covid-19 pandemic hit,» as quoted in the report.

What Are Hedge Funds and How Do They Operate?

A hedge fund is usually a collaboration of private investors whose collective funds are handled by expert fund managers, as per Daily Mail. These managers employ a range of strategies, both long and short positions, to ride out market volatility, according to the report.

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Tariff Uncertainty Drives Market Volatility

Currently, most of these managers are opting to reduce risky investments, reducing their exposure by selling individual stocks and closing their short positions, Daily Mail reported.

The hedge fund manager's moves come at a time when the stock market is very volatile and also a possibility of a recession. While, the uncertainty caused due to tariffs led all three major indexes to end the week in the red, as per the report.
Altimeter Capital founder and CEO, Brad Gerstner, said that, «We have high economic uncertainty, high political uncertainty and high technological uncertainty. Only one thing can happen,» Daily