1Q 26 Hedge Fund Strategy Performance, Gross of Fees 

• Industry Return: 1.8%
• Best Performing Fund Style: Managed Futures: 7.2%
• Worst Performing Fund Style: Event Driven: 0.4% 

Summary Commentary

Hedge funds delivered positive performance in Q1 26 despite a major geopolitical shock, with Managed Futures and Global Macro strategies benefiting from rallies in gold and non-U.S. equities in the front-half of quarter. Event Driven strategies struggles amid a high-volatility environment. 

Hedge funds entered the quarter with conviction in a risk-on and debasement portfolio, characterized by an overweight in equities, overweight on gold, and lower exposures in other major asset classes. However, positioning changed following the onset of the U.S.-Iran conflict. Managers de-levered their portfolios across all asset classes, with a focus on winners like equities and gold. 

By quarter-end, hedge fund positioning still reflected a modest risk-on and debasement bias, but overall exposures had moved back toward more neutral levels, indicating lower conviction rather than a clean risk-on stance.