Hedge funds deliver mixed September results on AI swings
Pedestrians walk during rush hour near the New York Stock Exchange (NYSE) in New York City, US, September 29, 2026. REUTERS/Jeenah Moon
HONG KONG/NEW YORK, Oct 7 : Global hedge funds delivered mixed results in September after surging bond yields, higher oil prices and swings in AI shares drove selling, while quant strategies posted gains, according to prime brokerage notes and investors.
Global fundamental equity long-short funds on average lost 0.55 per cent last month, Goldman Sachs Prime Services team said in a note, although they outperformed the MSCI World Index, which fell 1.3 per cent.
In contrast, computer-driven systematic equity long-short funds rose 3.46 per cent last month, marking their best monthly performance this year, according to Goldman Sachs.
Central bank headlines dominated September. The US Federal Reserve raised interest rates for the first time since 2023 and signalled more rate hikes in coming months. The US-Israeli war on Iran pushed oil prices higher and sent US Treasury yields to two-decade highs.
AI SWINGS COMPLICATE SHORT-TERM TRADES
Expectations of a slowdown in AI spending also triggered swings in crowded technology positions from the US to South Korea, complicating short-term trading.
In the US, hedge funds sold most sectors in September, but divergence emerged within the tech sector where electronic equipment and hardware were sold off, while semiconductor equipment and software attracted strong inflows, Goldman Sachs said.
Large multi-strategy funds managed modest gains. Citadel's flagship Wellington fund ended September up 1.1 per cent, leaving it 13.4 per cent higher for the year.
Balyasny went up 0.1 per cent while Millennium was flat last month.
In Asia, Morgan Stanley said macro uncertainty limited hedge fund performance in September. The bank estimated Asian hedge funds across strategies fell 0.6 per cent last month through September 25, compared with a 0.2 per cent decline globally.
Some strategies profited from the sharp moves in commodities and rates.
Bridgewater Associates' Pure Alpha macro fund returned 18.4 per cent in the first nine months of the year.
At the $22 billion Graham Capital, quantitative strategies stand out, with its Quant Macro fund gaining 5.36 per cent in September and 21.89 per cent year-to-date, while its Tactical Trend fund returned 3.26 per cent for the month and 31.16 per cent for the year.
Trend-following hedge funds were among the biggest winners in September with the Société Générale trend index gaining more than 4 per cent.
Short fixed income and long energy positions largely drove the gain, according to Winton Group.
Analysts said the rate-hiking environment could create greater divergence across the hedge fund industry.
"Some benefit directly from higher short-term rates, while others face higher financing costs that can materially reduce returns," said Don Steinbrugge, CEO at Agecroft Partners.
Here are some of ​the monthly and YTD returns:
Fund Name Strategy September YTD
Citadel Tactical Multi-strategy 2.2 per cent 28 per cent
Trading
Citadel Multi-strategy 1.1 per cent 13.4 per cent
Wellington
Citadel Equities Multi-strategy 1 per cent 24.5 per cent
Millennium Multi-strategy 0 per cent 8.1 per cent
Balyasny Multi-strategy 0.1 per cent 0.7 per cent
Bridgewater Pure Macro 18.4 per cent
Alpha
Graham Capital Macro 0.13 per cent 3.02 per cent
Absolute Return
Graham Capital Quant 3.26 per cent 31.16 per cent
Tactical Trend
Graham Capital Quant 5.36 per cent 21.89 per cent
Quant Macro
Graham Capital Macro 1.33 per cent 8.2 per cent
Proprietary
Matrix
Glazer Enhanced Event Driven 0.05 per cent 6.55 per cent
Fund
Dymon Asia Multi-strategy 0.7 per cent 7 per cent
Polymer Asia Multi-strategy 0.8 per cent 11.3 per cent
Pinpoint Multi- Multi-strategy -1.5 per cent 5.8 per cent
strategy
CFM Discus Multi-strategy 3.1 per cent 21.6 per cent
CFM Stratus Multi-strategy 2.9 per cent 12 per cent
CFM Systematic Macro 3.3 per cent 23.3 per cent
Global Macro
CFM Cumulus Multi-strategy 3.3 per cent 14.4 per cent
Source: Reuters reporting
