Key Takeaways
- • HFR reported that hedge funds posted strong gains in September 2025, extending a five-month streak of positive performance, with the HFRI Fund Weighted Composite Index advancing an estimated 2.4%.
- • The Asset Weighted Composite Index rose 2.7% in September, lifting third-quarter returns to 5.7%, the strongest quarterly performance since Q1 2021.
- • Macro and quantitative trend-following CTA strategies led the gains, with the HFRI Macro: Systematic Diversified Index jumping 4.5% and CTAs posting their best monthly gains since February 2024.
- • Equity Hedge strategies gained 2.6%, with the HFRI EH Index up 13.6% year-to-date, while the HFR Cryptocurrency Index rose 6.7%.
- • HFR President Kenneth J Heinz attributed the performance to record institutional capital in hedge funds and expects record industry capital growth through year-end and into 2026.
Summary
Hedge funds posted strong gains in September, extending a five-month streak of positive performance, according to data from hedge fund index and analysis specialist HFR. The HFRI Fund Weighted Composite Index advanced an estimated 2.4% for the month, while the Asset Weighted Composite Index rose 2.7%. Together these results lifted third-quarter returns to 5.7%, the strongest quarterly performance since the first quarter of 2021.
Macro and quantitative trend-following strategies led the advance. The HFRI Macro (Total) Index rose 3.4%, while the HFRI Macro: Systematic Diversified Index jumped 4.5%. Quantitative trend-following CTAs delivered their best monthly gains since February 2024, supported by broad asset-class moves across commodities, metals, and interest rates.
Equity Hedge funds gained 2.6% in September, led by Healthcare (+6.9%), Energy/Basic Materials (+6.4%), and Multi-Strategy (+4.7%) sub-strategies, with the total HFRI EH Index up 13.6% year-to-date. Fixed income-based Relative Value strategies advanced 1.3% as bond yields fell amid expectations of further Federal Reserve rate cuts. Event-Driven strategies added 1.2%, supported by ongoing M&A activity and record corporate investment in AI.
Cryptocurrencies also contributed, with the HFR Cryptocurrency Index up 6.7% in September. Liquid alternative UCITS funds mirrored the trend, with the HFRX Market Directional Index rising 2.6% and the HFRX Macro/CTA Index jumping 3.5%.
HFR President Kenneth J Heinz said record performance gains, on top of record levels of global institutional capital invested in hedge funds, have continued to drive strong portfolio returns for pension and sovereign wealth funds, family offices, and individual investors. He added that the gains are likely to reduce downside risk and volatility, and are expected to drive record industry capital growth through year-end and into 2026.
Macro and quantitative trend-following strategies led the advance. The HFRI Macro (Total) Index rose 3.4%, while the HFRI Macro: Systematic Diversified Index jumped 4.5%. Quantitative trend-following CTAs delivered their best monthly gains since February 2024, supported by broad asset-class moves across commodities, metals, and interest rates.
Equity Hedge funds gained 2.6% in September, led by Healthcare (+6.9%), Energy/Basic Materials (+6.4%), and Multi-Strategy (+4.7%) sub-strategies, with the total HFRI EH Index up 13.6% year-to-date. Fixed income-based Relative Value strategies advanced 1.3% as bond yields fell amid expectations of further Federal Reserve rate cuts. Event-Driven strategies added 1.2%, supported by ongoing M&A activity and record corporate investment in AI.
Cryptocurrencies also contributed, with the HFR Cryptocurrency Index up 6.7% in September. Liquid alternative UCITS funds mirrored the trend, with the HFRX Market Directional Index rising 2.6% and the HFRX Macro/CTA Index jumping 3.5%.
HFR President Kenneth J Heinz said record performance gains, on top of record levels of global institutional capital invested in hedge funds, have continued to drive strong portfolio returns for pension and sovereign wealth funds, family offices, and individual investors. He added that the gains are likely to reduce downside risk and volatility, and are expected to drive record industry capital growth through year-end and into 2026.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.