Global hedge funds returned 6% in the first half of 2026, outperforming their S&P 500 60% Exposure benchmark, with long-short equity strategies leading gains across the industry, according to the latest data from Canoe Intelligence.
The Canoe Total Hedge Fund Index, which tracks more than 3,500 funds across strategies, gained 6% in the six months to the end of June.
Long-short equity funds were the strongest performers, returning 9% over the period and providing the largest contribution to the overall index. Equity strategies account for 51% of the index.
Credit strategies generated a 3% return in the first half, putting them on course to exceed their full-year performance of 5% in 2025. That compares with returns of 6% in 2024 and 7% in 2023.
Private credit was a notable laggard, however. The strategy trailed the overall Canoe hedge fund index by 4 percentage points in the first half, marking its widest relative shortfall since 2023.
Performance dispersion among private credit managers was also limited, with most credit-focused funds returning less than 3% through June. Canoe said volatile bond markets provided greater opportunities for other credit strategies during the period.
Multi-strategy and relative-value funds each returned 5% in the first half, with both strategies exceeding their respective historical averages. Event-driven and macro strategies, meanwhile, lagged the benchmark.
The performance data reflects a highly uneven market environment during the first six months of the year, according to Mike Muniz, chief strategy officer at Canoe Intelligence.
“H1 2026 was anything but linear. We experienced a sharp pullback in the spring, then an equally sharp rebound,” Muniz said.
He added that the firm’s data showed that managers which successfully protected capital during the market decline were not necessarily the same funds that captured the subsequent recovery.
That distinction is increasingly important for institutional allocators, Muniz said, arguing that analysing individual fund performance rather than relying on aggregate estimates provides greater insight into how managers navigate changing market conditions.
