AI selloff drives quant funds' worst performance since August

Goldman Sachs reported that systematic quant funds suffered their worst performance since August, giving back a quarter of year-to-date returns as returns fell from 14.4% on June 22 to 10.8%. Losses stemmed from bets against crowded US equities and Asian developed-market stocks, amplified by Korean retail leverage and chipmaker volatility. Fundamental stockpicking hedge funds also dropped 2.2% as they aggressively exited AI-related trades, pushing overall hedge fund leverage to its lowest level in a year.