By Nell Mackenzie

LONDON (Reuters) - Hedge funds have turned optimistic about European companies that sell things people want but don't necessarily need, especially luxury goods, according to a Goldman Sachs note on Wednesday seen by Reuters on Thursday.

Consumer discretionary stocks in Europe like household appliances, luxury items and leisure have sparked renewed buying interest in hedge funds.

However, they have sold short those stocks exposed to U.S. President Donald Trump's potential tariffs, the note said.

"As the tariff landscape evolves, hedge funds have increasingly shorted tariff-exposed names," the note said.

Disclosed short positions in Italian spirits group Campari reached an all-time high, according to a separate report from research firm Breakout Point.

Campari has three production sites in Mexico, the main one producing tequila under its Espolon brand, and one in Canada that produces local whisky brand Forty Creek, according to its latest sustainability report.

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

Hedge funds with disclosed positions in Campari included Citadel and investment managers Arrowstreet Capital and Gladstone Capital a regulatory filing from the Italian markets authority showed.

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

A trader shorts an asset expecting its value to fall.

Most of this activity since mid-December has focused on stocks in Europe, whereas activity in UK equities remained relatively muted, the note said.

In 2024, luxury was a prime short target for hedge funds. But since this most recent earnings season kicked off, speculators have changed their bearish tune.

The number of hedge funds buying makers of European cars and car parts compared to those who are selling has shrunk to a "multi-year low," the note said.

(Reporting by Nell Mackenzie; Edited by Amanda Cooper and David Evans)