Key Takeaways
- • Global hedge funds posted their worst monthly performance in more than four years in March 2026, driven by market volatility triggered by the Iran war and significant equity market declines.
- • The S&P 500 fell 4.63% during Q1 2026, while the Nasdaq 100 dropped 4.87%; Goldman Sachs research shows hedge funds sold global equities for four consecutive months at the fastest pace in 13 years in response to volatility.
- • Major multi-strategy funds suffered material losses: Balyasny Asset Management declined 4.3% in March (down 3.8% for the quarter), while ExodusPoint fell 4.5% in March (down 2% for the quarter).
- • Citadel's $69 billion in AUM produced mixed results across strategies—its Global Fixed Income Fund fell 8.2% in March and 5.5% year-to-date, while the Tactical Trading Fund rose 1.8% in March and 5.3% year-to-date; the flagship Wellington fund fell 1.9% in March but remained up approximately 1% for the year.
- • The underperformance marks a sharp reversal from exceptional hedge fund performance in 2025, as strategies that typically justify their fees came under significant pressure during the volatile quarter.
Summary
Global hedge funds experienced their worst monthly decline in more than four years during March 2026, according to research from Goldman Sachs and reports from major Wall Street prime brokers. The deterioration was driven by heightened market volatility stemming from the Iran war, which triggered significant selloffs across equity markets and forced managers to reduce risk exposure. The S&P 500 declined 4.63% for the first quarter, while the Nasdaq 100 fell 4.87%, creating a challenging environment for traditional hedge fund strategies.
Goldman Sachs' analysis revealed that hedge fund managers responded to the volatility through aggressive de-risking, selling global equities for four consecutive months at the fastest pace in 13 years. This flight to safety underscores the pressure on strategies that had delivered strong returns during the exceptional performance environment of 2025. Large multi-manager funds bore the brunt of the selloff, with flagship operations reporting material losses. Dmitry Balyasny's Balyasny Asset Management fell 4.3% in March and 3.8% for the quarter, while Michael Gelband's ExodusPoint declined 4.5% in March with a 2% quarterly loss.
Citadel, the Ken Griffin-led hedge fund managing $69 billion in assets as of March 1, posted divergent results across its portfolio strategies. The Global Fixed Income Fund suffered the steepest decline, falling 8.2% in March and 5.5% year-to-date, reflecting fixed income market stress. However, the Tactical Trading Fund outperformed, rising 1.8% in March and 5.3% year-to-date. Citadel's flagship Wellington fund declined 1.9% in March but maintained a slight year-to-date gain of approximately 1%, while the equities fund posted a 0.7% March gain and remained up 2.9% for the year. The mixed performance across Citadel's strategies illustrates how volatility affected different hedge fund approaches inconsistently, with systematic and tactical strategies managing the downturn better than fundamental equity and fixed income positions.
Goldman Sachs' analysis revealed that hedge fund managers responded to the volatility through aggressive de-risking, selling global equities for four consecutive months at the fastest pace in 13 years. This flight to safety underscores the pressure on strategies that had delivered strong returns during the exceptional performance environment of 2025. Large multi-manager funds bore the brunt of the selloff, with flagship operations reporting material losses. Dmitry Balyasny's Balyasny Asset Management fell 4.3% in March and 3.8% for the quarter, while Michael Gelband's ExodusPoint declined 4.5% in March with a 2% quarterly loss.
Citadel, the Ken Griffin-led hedge fund managing $69 billion in assets as of March 1, posted divergent results across its portfolio strategies. The Global Fixed Income Fund suffered the steepest decline, falling 8.2% in March and 5.5% year-to-date, reflecting fixed income market stress. However, the Tactical Trading Fund outperformed, rising 1.8% in March and 5.3% year-to-date. Citadel's flagship Wellington fund declined 1.9% in March but maintained a slight year-to-date gain of approximately 1%, while the equities fund posted a 0.7% March gain and remained up 2.9% for the year. The mixed performance across Citadel's strategies illustrates how volatility affected different hedge fund approaches inconsistently, with systematic and tactical strategies managing the downturn better than fundamental equity and fixed income positions.
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