London, September 9 (Kiran News) — Hedge funds posted positive returns in August 2025, supported by strong equity markets in the United States and Asia, with healthcare and technology stocks driving gains, according to bank reports and sources familiar with fund performance.
Global equities hit record highs last month, rising more than 3.5%, which buoyed hedge fund strategies across the board.
Performance Highlights
Equity long/short hedge funds (stock pickers) gained 2.2% in August and are now up just over 10% year-to-date, according to a Goldman Sachs client note.
Systematic hedge funds, which trade using algorithms, returned 2.4% in August, bringing year-to-date gains to 12.3%.
Leverage levels fell across regions going into September, suggesting funds are turning more cautious despite expectations of a U.S. interest rate cut later this month.
Regional Flows
Goldman Sachs noted that hedge funds reduced equity exposure globally, except in China, Taiwan, India, and South Korea, where buying continued. Emerging markets Asia saw record hedge fund stock purchases.
Fund-Level Returns
Marshall Wace (UK), managing over $70 billion in assets, reported August gains of 0.41% in its Eureka Fund and 1.95% in its Market Neutral Tops Fund.
Citadel’s Wellington Fund rose 0.9% in August, extending year-to-date returns to 4.8%.
Millennium Management gained 1.2% for August, with year-to-date performance up 4.4%.
Market Outlook
While hedge funds capitalised on August’s market rally, trading activity has slowed in September, with JPMorgan noting a decline in flows. The cautious positioning suggests managers are preparing for potential volatility ahead of the U.S. Federal Reserve’s expected rate cut later this month.
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