G
lobal markets took a hit on Monday as the US President's tariff announcement sparked a trade war that could have far-reaching economic consequences. Hedge funds, sensing trouble ahead, rapidly shifted their portfolios to bet against global stocks. According to Goldman Sachs, hedge funds sold off stock holdings across all regions except Asia's developed markets in the week leading up to Friday.

    The scale of the selling was unprecedented since August, when a yen carry trade unwind sent shockwaves through US tech stocks. This time around, industrials, consumer discretionary, energy, and communications services equities bore the brunt of the hedge funds' selling spree. Notably, the number of short positions on industrial stocks approached twice that of longs betting on their rise.

    However, one sector stood out as a safe haven: real estate. Hedge funds bought up listed real estate stocks at an unprecedented pace, with residential, retail, and healthcare stocks being particularly popular. "Real estate often performs well in inflationary environments," said Bruno Schneller, managing director at Erlen Capital Management. "If trade wars lead to higher import costs and broader inflationary pressures, real estate becomes an attractive hedge against eroding purchasing power."