Hedge funds held about $13 trillion in gross assets in early 2026, more than three times their 2013 level, according to an International Monetary Fund study that warns similar positions and borrowed money can intensify market stress.
In ordinary trading, hedge funds can add liquidity by buying assets others want to sell. During a shock, funds facing losses or withdrawals may reduce similar positions together, adding pressure to prices.
The IMF’s October Global Financial Stability Report chapter examines how fund holdings, investor withdrawals and borrowing interact. Gross assets include assets financed with borrowed funds; they are not the same as investors’ net capital.
Why similar positions matter
A hedge fund is a private investment vehicle that can use a wide range of strategies, including borrowing, derivatives and short selling. A crowded trade occurs when many investors hold similar positions or depend on the same strategy.
When several funds try to sell the same asset at once, finding buyers can become harder. Price declines may prompt lenders to demand more collateral or investors to withdraw, creating pressure for additional sales.
The IMF found that stocks most exposed t...