Quick overview
- Global Hedge Funds are set to achieve their best monthly performance in over a decade, rebounding from March’s market correction due to geopolitical tensions.
- Equity long/short strategies have gained 7.7% month-to-date, marking their strongest results since early 2016.
- Multi-sector equity long/short funds experienced their largest capital inflows since 2022, indicating continued institutional support for active management.
- Top-performing strategies included market-neutral funds with a 10.3% gain and healthcare-focused funds with a remarkable 33.6% return.
Global Hedge Funds are on track to post their strongest monthly performance in more than a decade, rebounding sharply from the market correction triggered in March by the escalation of the conflict with Iran.
According to a quarterly report on the hedge fund industry by Goldman Sachs, managers running equity long/short strategies had gained 7.7% month-to-date as of Tuesday, putting them on course for their best monthly result since early 2016, when the bank began tracking the data.
Long/short strategies combine long positions in assets expected to rise with short positions in assets expected to fall, allowing managers to capture opportunities in both bullish and bearish market environments.
So far in 2026, these funds have generated returns of about 6.7%, with a clear advantage for those focused on Asia and China, regions that have recently outperformed other global markets.
Rebound after March’s selloff
The report notes that the broader hedge fund industry, across all strategies, delivered average gains of 1.6% in the first quarter, despite a 1.8% decline in March, when geopolitical volatility hit macro traders particularly hard.
During that period, the war in the Middle East and the surge in oil prices triggered sharp moves in bonds, equities and currencies, affecting multiple investment strategies. However, the swift recovery that followed helped restore returns and revive risk appetite across parts of the market.
Record inflows and rising dispersion
Goldman Sachs also highlighted that multi-sector equity long/short funds recorded their largest capital inflows since 2022 during the quarter.
The data suggests that institutional investors and limited partners continue to favor active managers even in a challenging environment marked by recent volatility.
Another notable development was the increase in performance dispersion among individual funds, which reached a three-year high in March. This widening gap between winners and losers is typical of more volatile markets with less uniform direction.
Where returns were strongest
Among the top-performing strategies in the quarter were market-neutral funds, which gained 10.3%. These vehicles aim to minimize exposure to the overall direction of the market while capturing relative value opportunities between assets.
Strong results were also recorded by healthcare-focused funds, which delivered returns of 33.6%, and Asia-focused funds, which rose 28.1%.
According to Goldman Sachs, much of these gains came from “alpha” generation—profits derived from asset selection and trading skill rather than simply from the broader market rally.
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.