GS What Matters Today HF Performance and Flows in July, Reiterate our Buy in Korea, Hatzius Argues Less Information brings More Noise, How China Policy

1) HF Performance and Flows in July L/S Performance Estimates: Global Fundamental L/S managers -4.3% in July, their second-worst monthly drawdown in the last four years (still +13.1% YTD). Asia Fundamental L/S managers were -15.2% in July - the worst monthly drawdown on our record, but are still +22.2% YTD.

Trading Flows: HFs modestly net bought global equities driven by risk-unwinds, with this month seeing the largest de-grossing activity since Jan ’21.

Exposures: Overall book gross leverage saw the second largest monthly decline on our record (only behind July ’25). Meanwhile, Asian equities saw large net selling flows (Z-score -2.3 over 5 years), coupled with the largest risk-off flows in our records (Z-Score -1.9 over 5 years). Long sales dominated the net selling flows.

Regional Positioning: Every major region saw de-grossing activity in July, led by short covers in North America and long sales in EM Asia.