Key Takeaways
- • Many of the world's largest hedge funds posted their steepest losses since the COVID-19 pandemic in October 2026, according to Bloomberg, as a tech selloff, a government bond slump and the Brazil presidential election shock drove up volatility.
- • Credit and equity strategies both lost money, and JPMorgan Chase's positioning intelligence team said the losses were so broad-based that there was "nowhere to hide" from a strategy perspective.
- • Arini, a credit hedge fund, was down 12.1% through Oct. 23 and on track for its worst monthly loss, while Marshall Wace's Eureka fund fell 5.4%.
- • Quantedge, which manages $8.2 billion, gained 7.2% in October, lifting its year-to-date return to 60%, while Citadel's Wellington fund returned 1.7%, bringing its year-to-date gain to 15.3%.
Summary
Many of the world's largest hedge funds suffered their steepest monthly losses since the COVID-19 pandemic in October, according to Bloomberg. A selloff in technology stocks, a slump in government bond markets and the shock from Brazil's presidential election combined to drive up market volatility, and both credit and equity strategies lost money on the moves.
JPMorgan Chase's positioning intelligence team said in a note to clients that October was a month most hedge funds would probably rather forget. The team added that the difficulties were so broad-based that there appeared to be nowhere to hide from a strategy perspective.
Losses were widespread across managers. Arini, a credit hedge fund, was down 12.1% through Oct. 23 and on track for its worst monthly loss. Marshall Wace's Eureka fund fell 5.4% in October, trimming its year-to-date return to 5.3%. ExodusPoint Capital Management lost 2.4%, Millennium Management's multi-strategy fund lost 2.3% and equity-focused Northrock lost 2.3%.
The market backdrop included violent protests in France that deepened a selloff in government bonds, and a slide in technology stocks as concerns over artificial intelligence resurfaced and weak earnings added pressure. Currency markets were also hit as prices swung when Flavio Bolsonaro, a conservative, unexpectedly led the first round of Brazil's presidential election before losing the runoff to President Luiz Inacio Lula da Silva.
A few funds posted gains. Quantedge, which manages $8.2 billion in assets, jumped 7.2%, lifting its year-to-date return to 60%, with commodities, bonds and a long-short market-neutral strategy driving performance. A long-short market-neutral strategy buys undervalued stocks and sells overvalued ones short, reducing exposure to overall market swings. Citadel's flagship Wellington fund returned 1.7%, raising its year-to-date gain to 15.3%.
JPMorgan Chase's positioning intelligence team said in a note to clients that October was a month most hedge funds would probably rather forget. The team added that the difficulties were so broad-based that there appeared to be nowhere to hide from a strategy perspective.
Losses were widespread across managers. Arini, a credit hedge fund, was down 12.1% through Oct. 23 and on track for its worst monthly loss. Marshall Wace's Eureka fund fell 5.4% in October, trimming its year-to-date return to 5.3%. ExodusPoint Capital Management lost 2.4%, Millennium Management's multi-strategy fund lost 2.3% and equity-focused Northrock lost 2.3%.
The market backdrop included violent protests in France that deepened a selloff in government bonds, and a slide in technology stocks as concerns over artificial intelligence resurfaced and weak earnings added pressure. Currency markets were also hit as prices swung when Flavio Bolsonaro, a conservative, unexpectedly led the first round of Brazil's presidential election before losing the runoff to President Luiz Inacio Lula da Silva.
A few funds posted gains. Quantedge, which manages $8.2 billion in assets, jumped 7.2%, lifting its year-to-date return to 60%, with commodities, bonds and a long-short market-neutral strategy driving performance. A long-short market-neutral strategy buys undervalued stocks and sells overvalued ones short, reducing exposure to overall market swings. Citadel's flagship Wellington fund returned 1.7%, raising its year-to-date gain to 15.3%.
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