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.
90% hedge funds won't pay $100k a month for early Trump posts: Hedgeweek® poll
Cost and a noisy signal outweigh speed, as just 7.5% of managers would consider paying $100,000 a month for faster access to Trump’s…
More
Patience and discipline in a value investor’s 40-year playbook
From spin-off structures to Japan’s governance reform, the veteran investor is targeting undervalued industrials while sidestepping the AI…
More
Two Sigma explores stake sale amid founders’ governance dispute
Two Sigma Investments is considering selling a minority stake to an external investor in a bid to resolve a longstanding governance dispute…
More