Hedge funds posted a third consecutive month of gains in June, according to HFR, as record equity markets, continued strength in AI-related stocks and an active mergers and IPO market supported industry performance.
The HFRI Fund Weighted Composite Index (FWC) rose 0.4% during the month, taking second-quarter returns to 6.55% and first-half gains to 7.6% – the industry’s strongest start to a year since 2021.
Equity Hedge strategies led performance, with the HFRI Equity Hedge Index rising 1.3%. Technology and healthcare managers were the strongest performers, while event-driven funds also advanced as M&A activity and major IPOs created opportunities. Relative value strategies posted modest gains, while macro managers were the weakest-performing group, pressured by falling energy prices.
Kenneth J. Heinz, President of HFR, said hedge funds continued to benefit from strong equity markets and AI-driven investment themes but warned the second half of the year could bring greater uncertainty from geopolitical risks, interest rates and AI valuations.
Overall, around 55% of hedge funds generated positive returns during June, highlighting the industry’s resilience despite increasingly mixed market conditions.