Hedge fund returns rise in turbulent July, driven by stock market gains.

Hedge fund returns rose in July, driven by rising stock markets that hit record highs. However, some funds were negatively impacted by US trade uncertainty. According to Goldman Sachs, hedge fund stockpickers returned 1.5% in July and are up 7.8% for the year. Algorithmic funds using systematic trading strategies were hurt by busy trades. The S&P 500 returned 1.38% in July.

July 2025 saw hedge funds grappling with both opportunities and challenges as stock markets reached record highs. According to Goldman Sachs, hedge fund stockpickers returned 1.5% in July, adding to their year-to-date gains of 7.8% [1]. This performance was driven by a resilient bull market, with the S&P 500 enjoying its third straight month of gains and a 2.2% rise in July alone [1].

However, the market's upward trajectory was not without its headwinds. Some hedge funds were negatively impacted by U.S. trade uncertainty, which led to a more cautious approach among institutional investors [2]. While stock pickers benefited from crowded trades, algorithmic funds using systematic trading strategies faced difficulties due to busy markets [2].

The S&P 500, which hit record highs during July, returned 1.38% [1]. The biggest multi-strategy funds posted muted returns, with Schonfeld Strategic Advisors' flagship fund Strategic Partners down 0.3% in July and up 5.8% for the year [2]. Similarly, Marshall Wace's Market Neutral TOPS fund returned a negative 0.2% in July, but its half-year performance remained positive at around 11% [2].

Overall, hedge funds demonstrated a mixed performance in July, with some funds benefiting from the market's resilience while others struggled with trade uncertainty and busy markets. As the market continues to evolve, investors and financial professionals should remain vigilant and adapt their strategies accordingly.

References:
[1] https://www.cnbc.com/2025/08/06/hedge-funds-are-turning-cautious-with-stocks-at-record-highs.html
[2] https://www.reuters.com/markets/wealth/stockpickers-rise-quants-suffer-multistrategy-funds-steady-july-2025-06-03/
[3] https://www.newsmax.com/finance/streettalk/hedge-fund-returns/2025/08/05/id/1221352/