Global hedge funds sold shares of banks, insurance, fin-tech and trading companies in the week to March 13, making financials the best-selling stock sector this year, Goldman Sachs said in a note to clients seen by Reuters on Monday.

Hedge funds “aggressively shorted” global financial stocks last week and the sector was a net selloff internationally, the note said.

A short position profits when asset values ​​decline.

The S&P financials index is down more than 11% this year, while the banks index in Europe is down about 8%.

The move comes as the sector faces selling pressure, along with broader markets, on worries about the impact of the Middle East war on the global economy and concerns that the link between financial firms and private lending may be more closely linked than previously thought. A recent Moody’s report showed that the U.S. Banks have lent nearly $300 billion to private lenders by June 2025. JPMorgan Chase cut the cost of some loans to private credit funds after reviewing the impact of market turmoil around software companies, Reuters reported last week following an FT report.

“When a big institution like JPM (JPMorgan) starts to mark down deals, the markets pay attention because it increases the possibility that others will have to follow,” said Bruno Schneller.

“If investors are concerned that marks may move across the system, the easiest way to hedge that risk is through liquid proxies such as banks, insurance companies and financial indices,” Schneller said, adding that short positions in financial stocks may be less of a view on banks than as a hedge against credit risk in the broader financial system.

This could also add a way for speculators to recession-proof their portfolios, he said.

All sub-sectors of finance (excluding regional banks) were net sellers so far this year, led by capital markets firms, financial services and consumer finance, the Goldman report said.