Hedge funds ended June with solid year-to-date gains, supported by successful positioning around crowded equity trades, though performance was uneven across strategies amid volatility in commodities and fixed income markets.

According to a Goldman Sachs prime brokerage note cited by Reuters, fundamental long-short equity funds posted strong returns, benefiting from selective short positioning and exposure to crowded market segments. These managers delivered 4% in June, lifting year-to-date gains to 17.4%, while posting an 18.4% return for the second quarter—the strongest quarterly performance in Goldman’s records.

Stock pickers were aided by tactical positioning in sectors including healthcare and other momentum-linked trades, as well as effective navigation of crowded positioning in large-cap equities. However, volatility in global equity markets weighed on parts of the industry, particularly in strategies exposed to concentrated moves in mega-cap technology names and Chinese equities.

Systematic strategies delivered more modest gains, with quant and model-driven funds up around 1.1% in June and 11.3% year-to-date. Performance was impacted by reversals in large U.S. technology stocks and Chinese equities, as well as losses tied to short positioning in long-dated U.S. Treasuries.

Commodity exposures also proved a drag, with losses across oil, metals and agricultural markets outweighing gains in select positions such as corn, cattle and certain currency trades. Trend-following strategies saw mixed outcomes, with gains in the Japanese yen and Canadian dollar offset by losses in sterling, the Australian dollar and Norwegian krone.

Overall, hedge fund performance reflected a highly fragmented market environment, where stock selection and positioning around crowded trades proved more effective than broad macro or systematic exposures.