3Q 25 Hedge Fund Strategy Performance, Gross of Fees
- Industry Return: 6.4%
- Best Performing Fund Style: Emerging Markets: 10.5%
- Worst Performing Fund Style: Fixed Income: 3.2%
Summary Commentary
Hedge Funds delivered strong positive performance in Q3-25 with Emerging Market and Equity Long/Short strategies benefitting from rallies in Asian equities while Fixed Income strategies were modestly positive, challenged by tighter credit spreads.
Hedge Funds increased their risk-taking throughout the quarter as policy volatility eased through the period. After finishing Q2-25 with moderate longs on equities and bonds, managers quickly added to their equities and bonds exposure as the probability of rate cuts and AI optimism increased. Short US Dollar and long gold views continued through the quarter.
Funds ended the third quarter with modestly long positioning across most markets, with strong conviction in only a few places like long Asian equities, short US Dollar, and long growth and rate-sensitive equities.
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