Hedge Funds are up 1.5% through February 19 with sideways trading for the most popular long positions. Meanwhile, January brought a sharp 20% short squeeze that further dragged down returns.
Massive short squeeze takes a bite out of returns
According to Goldman Sachs’ 13F Hedge Fund Trend Monitor, volatility in Goldman’s basket of the most concentrated short positions surged to the highest level since the tariff shock last year. For the latest 13F data, Goldman looked at 1,029 hedge funds with $4.4 trillion of gross equity positions at the start of 1Q 2026 ($2.9 trillion long and $1.5 trillion short).
According to the firm, the recent short squeeze weighed on almost all sectors, with concentrated shorts falling outright year to date in communication services, information technology and financials.
Shift toward value names
Goldman’s list of the most popular long positions among hedge funds has gained 3% year to date — exactly half as much as the equal-weight S&P 500. A basket of the most concentrated shorts has gained 9%.
The firm reported that hedge fund longs were caught between a factor rotation from growth to value and then a rally in momentum. Goldman said the top hedge fund long positions have been largely correlated with growth and momentum with a negative correlation to value.
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