A report from Goldman Sachs on July 30 shows that equity hedge funds focused on the Asian market are facing their largest single-month drawdown on record, as a broad sell-off in AI concept stocks wiped out most of the gains from previous concentrated bets on the sector. According to Goldman Sachs, as of July 28, fundamental long-short equity hedge funds focusing on Asia fell an average of 18.6% this month. In the first half of the year, these funds were among the best-performing globally due to early bets on AI hardware leaders, including South Korean chipmakers SK Hynix and Samsung Electronics. Some funds posted returns of over 100% at one point. However, the market has now undergone a sharp reversal. Goldman Sachs noted that since the year-to-date return peaked at 40% on July 22, these funds have given back 21 percentage points of their year-to-date gains. The bank pointed out that the crowded AI trades that drove significant gains in the first half are now becoming the main factor behind the unusually large drawdown this month. Specifically, funds with higher exposure to AI themes suffered greater losses. Amid the market turmoil, hedge funds have been taking profits and reducing risk. According to Goldman Sachs data, as of July 27, Asian hedge funds have reduced exposure for eight consecutive trading days, with the five-day cumulative reduction in gross exposure hitting a record high.