Hedge funds net sold U.S. healthcare stocks last week for the first time in 14 weeks, according to Goldman Sachs, as political uncertainty around expiring insurance subsidies intensifies.
Key signals from the market:
- 🩺 Healthcare providers, pharma, and biotech saw net selling
- 📉 Short positions outweighed longs by more than 8:1, indicating strong downside conviction
- 🧬 Only life sciences and healthcare technology attracted net inflows
The catalyst:
Enhanced health insurance subsidies — expanded during COVID — expire on December 31 unless Congress acts, potentially raising costs for millions of Americans and pressuring providers’ margins.
Why it matters:
- Healthcare exposure remains elevated vs historical averages, leaving room for de-risking
- Cost inflation and subsidy cuts are becoming politically sensitive ahead of the 2026 midterms
- Policy risk is now a tradable macro factor in healthcare equities
Notable recent short targets include Hims & Hers and Bruker, according to securities lending data.
Bottom line:
Healthcare is shifting from a defensive allocation to a policy-driven volatility trade — and hedge funds are positioning accordingly.