Hedge fund leverage, as measured by margin debt on the New York Stock Exchange, declined in August by the most in a single month since November 2008, as managers cut their exposure to the markets amidst a backdrop of global market sell-offs and risk aversion, according to Bank of America Merrill Lynch's weekly hedge fund trade monitor.

The figures -- see Chart 1 -- show that margin debt on the New York Stock Exchange declined by 11.1% to $272bn in August, indicating less of an appetite for risk among hedge funds.