Key Takeaways
- • Hedge funds delivered a 1.3% return in September, with regional performance divergence: Europe, Asia, and Middle East managers outperformed North American peers, according to JPMorgan client data.
- • Bridgewater's Pure Alpha fund surged 26.2% year-to-date through September 29, with additional strong performances across its Asia Total Return (32.5%), China Total Return (28.4%), and All Weather (15.3%) funds.
- • Marshall Wace's Eureka Fund posted 1.32% returns in September, reaching 8.04% year-to-date, while its Market Neutral Tops fund returned 0.45% for the month and 13.66% for the year; systematic stock-trading hedge funds broadly are up over 13% in 2025.
- • U.S. equity positioning remained only "somewhat bullish" among hedge funds despite global equities rising 3.4% in September, reflecting cautious sentiment ahead of potential market headwinds.
- • Crowding in "Magnificent Seven" tech stocks (Apple, Amazon, Nvidia) persisted near historical highs, while European stock-pickers favored long equity bets while quantitative and multi-strategy funds wagered on price declines.
Summary
Hedge funds generated a 1.3% return in September, extending their positive performance momentum through a period when global equities climbed 3.4% and developed market sovereign bonds rose 0.7%, according to JPMorgan client analysis reviewed by Reuters. The September results underscore significant regional performance divergence, with managers in Europe, Asia, and the Middle East outperforming their North American counterparts—a pattern reflecting differing market exposures and hedging strategies across geographies.
Top-tier hedge fund managers posted notably stronger year-to-date returns. Bridgewater Associates, with $92.1 billion in assets, achieved a 6% monthly gain in its flagship Pure Alpha fund through September 29, translating to a 26.2% year-to-date return. The firm's other vehicles demonstrated even sharper performance: its Asia Total Return fund posted 32.5% returns, China Total Return fund delivered 28.4%, and All Weather fund returned 15.3% year-to-date. British competitor Marshall Wace, managing $79 billion, reported 1.32% September returns in its Eureka Fund, bringing year-to-date performance to 8.04%. The firm's Market Neutral Tops fund delivered 0.45% for the month while accumulating 13.66% year-to-date gains.
Systematic stock-trading hedge funds—algorithmic and quantitative strategies—have particularly outperformed in 2025, rising over 13% year-to-date according to Goldman Sachs, a notable outperformance relative to the broader hedge fund average. Strategy divergence emerged across regions: European stock-pickers positioned for equity appreciation, while multi-strategy and quantitative funds in Europe wagered on price declines. In Asia, where equities advanced, hedge funds paradoxically carried more downside bets than upside positions. Meanwhile, JPMorgan's positioning analysis indicated U.S. stock sentiment remained only "somewhat bullish," suggesting limited conviction among hedge fund managers despite strong September equity performance. Crowding in the "Magnificent Seven" technology stocks—including Apple, Amazon, and Nvidia—remained concentrated near historical highs, presenting both opportunity and concentration risk for portfolio managers.
Top-tier hedge fund managers posted notably stronger year-to-date returns. Bridgewater Associates, with $92.1 billion in assets, achieved a 6% monthly gain in its flagship Pure Alpha fund through September 29, translating to a 26.2% year-to-date return. The firm's other vehicles demonstrated even sharper performance: its Asia Total Return fund posted 32.5% returns, China Total Return fund delivered 28.4%, and All Weather fund returned 15.3% year-to-date. British competitor Marshall Wace, managing $79 billion, reported 1.32% September returns in its Eureka Fund, bringing year-to-date performance to 8.04%. The firm's Market Neutral Tops fund delivered 0.45% for the month while accumulating 13.66% year-to-date gains.
Systematic stock-trading hedge funds—algorithmic and quantitative strategies—have particularly outperformed in 2025, rising over 13% year-to-date according to Goldman Sachs, a notable outperformance relative to the broader hedge fund average. Strategy divergence emerged across regions: European stock-pickers positioned for equity appreciation, while multi-strategy and quantitative funds in Europe wagered on price declines. In Asia, where equities advanced, hedge funds paradoxically carried more downside bets than upside positions. Meanwhile, JPMorgan's positioning analysis indicated U.S. stock sentiment remained only "somewhat bullish," suggesting limited conviction among hedge fund managers despite strong September equity performance. Crowding in the "Magnificent Seven" technology stocks—including Apple, Amazon, and Nvidia—remained concentrated near historical highs, presenting both opportunity and concentration risk for portfolio managers.
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.