FACTBOX-Hedge funds made gains in February before dour start to March

By Nell Mackenzie and Anirban Sen

LONDON/NEW YORK, March 4 (Reuters) - Hedge funds turned out a positive trading performances in February, reaping returns from frothy markets lifted by tech stocks just before a March global sell-off took hold.

World markets came under broad selling pressure on Tuesday on concerns that the war in Iran could disrupt global supply chains, push up energy prices and fuel inflation.

Hedge fund performance globally rose by 0.9% in February across all strategies, according to a JPMorgan JPM.N client note this week looking at data to February 26.

Stock pickers trading long and short positions in global equities posted a 1.3% gain, while quantitative equities hedge funds posted a 2.8% return, a separate note from Goldman Sachs GS.N said, citing data to February 27.

Hedge funds sold stocks in February in the largest amounts seen since April 2025, when President Donald Trump's raft of global tariffs hit world markets.

A hedge fund is a private trading firm which trades high-net investors money and can profit from either buying or selling stock.

These speculators sold mostly index and ETF products in February and positioned themselves short, betting that asset prices would fall, said the Goldman note.

Leverage, borrowing which hedge funds use for both long and short bets, rose to 308.6%, nearing a one-year high, and at its highest when measured on a five-year scale, said the bank.

During the month, hedge funds sold North American stocks and bought Asian equities, said Goldman Sachs. U.S. tech and media stocks were the most sold since March 2025, said the Goldman note.

This gave hedge funds lots to trade. Some of the biggest multi-strategy funds such as Citadel returned between 1% and 3.5%, said a source familiar with the matter.

Citadel declined to comment on the numbers.