NEW YORK, March 10 (Reuters) -

Hedge funds unwound positions in single stocks on Friday at

the largest amount in over two years, with some activity

comparable to March 2020, when portfolio managers cut market

exposure during the pandemic, Goldman Sachs ( GS ) said in a note on

Monday.

U.S.

major stock indexes plummeted

on Friday, with the Nasdaq down 4%, amid fears that

President Donald Trump's tariff policy will drive the world's

largest economy into a recession.

"It was a classic de-leveraging crunch," said James

Koutoulas, CEO at hedge fund Typhon Capital Management.

Goldman Sachs ( GS ) detailed that hedge funds' sale of single

name stocks was the biggest in over two years. It added some

hedge funds' large de-risking moves in concentrated trades could

be compared to what was seen in March 2020. It also cited

January 2021, when hedge funds were forced to unwind short

positions in so-called meme stocks, popular among retail

investors.

Hedge funds' unwinding comes at a time when leverage in the

industry is at a record level. A separate Goldman Sachs ( GS ) note

showed overall hedge funds' leverage in equity positions was at

2.9 times their books, a record level over the last five years.

Some investors told Reuters they were concerned that

some high-leverage hedge fund could keep de-risking in the

coming days, impeding a potential market recovery.

Hedge funds unwound long and short positions that Goldman

Sachs ( GS ) said were crowded, or common among many investors.

Goldman Sachs ( GS ) saw a risk-off trend in 10 of the 11

global sectors, mainly in industrials.

On Monday morning, before the major indexes dipped even

further, equities long/short hedge funds were down 1.5%, while

systematic managers were down 0.3%, according to the bank.