Headline: "Goldman Sachs: Hedge Funds Slash Chinese Stock Holdings to Record Low Since September"

Goldman Sachs reported that global hedge funds made a sharp rotation in October, buying U.S. stocks ahead of the U.S. elections while abandoning Chinese and broader emerging market equities. According to Goldman’s prime brokerage team, China, where the stock markets surged by 20% last month amid a series of stimulus policies, experienced significant outflows this month.

Goldman Sachs estimates that hedge funds have withdrawn about 80% of their highest cumulative purchases in Chinese equities as of October 23. "This month’s net sales in emerging markets, led by sales in Chinese stocks, are among the largest on record," the bank noted.

The bank also mentioned that hedge funds returned to U.S. equities for the first time in six months, as strong employment data and corporate earnings helped offset recession fears. Furthermore, with the U.S. presidential race approaching and heightened volatility anticipated, Goldman Sachs indicated that hedge funds have reduced leverage both over the past week and in October. The gross leverage levels of stock-picking funds are near their lowest in 12 months, signaling a more cautious stance.