Hedge funds delivered solid returns through October, with stock-picking funds up 13% year-to-date — slightly ahead of many leading multi-strategy peers, according to a Goldman Sachs report and market sources.
In October, equity long/short managers returned 1.75%, lagging the S&P 500’s 2.3% rise, as volatility and crowded trades shaped performance.
Still, flows into global equities continued for a second straight month, signaling managers’ long-term confidence in individual stock fundamentals.
“Technology and healthcare remained core drivers of alpha,” Goldman’s report noted.
🔹 Sector & Strategy Highlights
- 💻 Tech, Media & Telecom (TMT): +2.1% — best-performing hedge-fund sector in October.
- 🏥 Healthcare funds: +8.4% — fifth consecutive month of gains.
- ⚙️ Systematic / quant funds: Mixed, pressured by short-side exposures.
- 🌏 Macro funds: Stronger performance driven by tactical positioning in the U.S. and China.
- 🏦 Multi-strategy giants — Citadel, Millennium, and Balyasny — all reported positive returns.
However, by early November, tech-heavy markets faced their steepest weekly drop in seven months, reminding investors that momentum remains fragile.
🔹 The Takeaway
2025’s hedge-fund playbook reflects a barbell of conviction and caution —
strong alpha generation in growth sectors paired with tactical discipline amid policy uncertainty.
With volatility resurfacing and macro headwinds building, manager selection and risk timing will likely define the final quarter’s winners.