Posted by Colin Lambert. Last updated: November 11, 2026
Equity market struggles in the technology and AI sectors saw hedge funds struggle in October, with even Macro strategies dropping on the month, according to indexation and analysis firm HFR.
The HFRI Fund Weighted Composite Index was -1.36% in October, cooling year-to-date performance to +5.42%. Losses were led by Equity Hedge funds at -2.39% – funds remain +4.65% on the year, and while Macro funds were also down, they remain the best sub-sector in the HFR indices.
The HFRI Macro (Total) Index was -1.03% in October for +9.84% year-to-date, with only the Active Trading Index seeing positive territory at +0.19%. The Currency Index also dropped, by 0.69% for +3.35% year-to-date, while systematic funds again fared better than their discretionary brethren, albeit with both in negative territory. The HFRI Systematic Direction Index was -0.17% in October, while the Discretionary counterpart was -2.8%. Year-to-date, the former is far outperforming the latter at +15.56% and +2.93% respectively.
The only headline index to be positive in October was the HFR Relative Value (Total) Index, which eked out a 0.17% gain on the month, bringing year-to-date performance to +3.44%. Elsewhere, the HFRI Multi-Manager/Pod Shop Index was -1.16% for +1.27% year-to-date.
The rollercoaster ride for crypto-orientated hedge funds continued, with the HFR Cryptocurrency index falling 9.43%, dragging it back into the red for the year at -2.34%. The HFR Blockchain Composite Index was also down by 9.17%, for -2.45% year-to-date, while the HFR DeFi Index remains the only positive in the suite, after rising 0.2% in October, for +23.93% year-to-date.
“Hedge funds were positioned for rapid policy shifts heading into the midterms, and the result guarantees that volatility will remain elevated over the intermediate term. Factors ranging from AI regulation and data centres to tariffs and taxes, interest rates and the Iran conflict will drive market performance, with an increased possibility for disruptions and dislocations in the coming quarters,” says Kenneth Heinz, president of HFR. “Hedge funds are now navigating a highly uncertain environment with regard to what the policy and oversight changes will look like over the next two years, ensuring more market instability which in turn should provide significant opportunities for active management.”