Hedge funds are buying luxury, short-drinking and driving in Europe, says Goldman Sachs

By Neil McKenzie

LONDON (Reuters) – Hedge funds are bullish on European companies that sell things people want but don’t necessarily want, particularly luxury goods, a Goldman Sachs note showed to Reuters on Wednesday.

Consumer interest in European stocks, such as home goods, luxury goods and entertainment, has fueled renewed buying interest in hedge funds.

However, they short-sold stocks that suggested possible tariffs to US President Donald Trump, the note said.

“As the tariff landscape continues to evolve, hedge funds have been shorting tariff-exposed names,” the note said.

A separate report from Breakout Point indicated that short positions expressed in Italian spirits group Cammari have peaked.

Campari has three production sites in Mexico, which produces its flagship tequila brand Espolón, and one in Canada, which produces local whiskey brand Forty Creek, according to its latest sustainability report.

According to Citi, Campari imports 27 percent of its U.S. sales from Mexico and Canada, Reuters reported on Monday.

Hedge funds Citadel and investment managers Arrowstraat Capital and Gladstone Capital have known positions in Campari, a regulatory filing from the Italian market authority showed.

Citadel declined to comment. Arrowstreet Capital, Gladstone Capital and Campari did not immediately respond to a request for comment.

A trader expects an asset to fall in value.

Much of the activity since mid-December has focused on European stocks, while activity in UK stocks has been relatively muted, the note said.

In the year In 2024, luxury hedge funds were a major short target. But since the start of this most recent earnings season, speculators have changed their bearish tone.

The number of hedge funds buying European cars and auto parts fell to a “multi-year low” compared to selling them, the note said.

(Reporting by Neal McKenzie; Editing by Amanda Cooper and David Evans)