Gold Sachs has warned clients that hedge funds face the worst monthly drawdown in over four years, according to a report from Goldman Sachs. The firm attributed this month's volatility to geopolitical tensions, particularly the Middle East conflict involving Iran, and rapid shifts across interest rates, currencies, commodities, and equity factor rotations. Fundamental long/short stockpickers faced negative returns across all regions, led by Asia-focused funds which were down 7.3% and European fund managers seeing a decline of 6.3%. For the year till March 31, Asia, Europe, and U.S. ​long/short fund managers are up 6.5%, down 1.8%, and down 2.4%, respectively. Technology, media, and telecommunications (TMT) was one of the worst-hit sectors, with long-/short funds declining 7.8% in March and 11.8%. Large multi-manager funds, including Dmitry Balyasny's flagship multi-strategy fund and Michael Gelband's ExodusPoint, also saw big drawdowns during the month and quarter. Long/short hedge funds that employ systematic stock trading strategies rose 1.07% in April, driven by alpha returns, Goldman said. Index-tracking products, like ETFs, as well as single stocks were both net sold, and gross leverage levels were more than three times their books, close to a record.