Key facts
- Global hedge funds saw mixed results in September.
- Fundamental equity long-short funds lost 0.55% on average in September.
- Systematic equity long-short funds gained 3.46% in September.
- Citadel's flagship Wellington fund was up 1.1% in September.
- Bridgewater Associates' Pure Alpha macro fund returned 18.4% in the first nine months of the year.
- Graham Capital's Quant Macro fund gained 5.36% in September.
Global hedge funds experienced a mixed performance in September, with gains in quantitative strategies contrasting with losses in fundamental equity long-short funds. Surging bond yields, higher oil prices, and volatility in AI-related technology stocks contributed to the challenging trading environment.
According to Goldman Sachs Prime Services, fundamental equity long-short funds averaged a loss of 0.55% in September, though they outperformed the MSCI World Index, which fell 1.3%. In contrast, computer-driven systematic equity long-short funds achieved their best monthly performance of the year, rising 3.46%.
Central bank actions, including the Federal Reserve signaling further rate hikes and the US-Israeli war on Iran pushing oil prices higher and US Treasury yields to two-decade highs, dominated market sentiment. Swings in AI spending expectations also impacted technology positions globally.
Large multi-strategy funds reported modest gains, with Citadel's flagship Wellington fund up 1.1% in September, bringing its year-to-date gain to 13.4%. Balyasny rose 0.1%, while Millennium was flat.
In Asia, macro uncertainty limited hedge fund performance, with an estimated 0.6% decline across strategies through September 25, according to Morgan Stanley. However, some strategies profited from sharp moves in commodities and rates. Bridgewater Associates' Pure Alpha macro fund returned 18.4% in the first nine months of the year, and Graham Capital's Quant Macro fund gained 5.36% in September.