Macro Bounces Back as Hedge Funds Surge in September

Hedge funds continued their positive run in September, according to analytics and indexation firm HFR, boosted by a recovery from a multi-month slump by Macro hedge funds.

The headline HFRI Fund-Weighted Composite Index, rose an estimated 2.4% in September, bringing Q3 performance to +5.7%, the strongest quarterly gain in four-and-a-half years. Year-to-date the index is +9.78%.

Performance was led by the HFRI Macro (Total) Index, at an estimated +3.4% for the month, bringing year-to-date performance into the black at +3.85%. Within the sub-indices, the HFRI Macro: Systematic Diversified Index surged +4.48%, although it remains in the red at -2.42% year-to-date. The Systematic Diversified Index was also +4.48%, and remain down 2.38% year-to-date, while its Discretionary peer rose 1.95% but is up 12.09% year-to-date.

Currency traders eked out a tiny gain of +0.03%, and are +0.62% year-to-date, while the Trend Followers Index rose 3.96%, dragging itself into the black at +0.52%. Best performing Macro sub-index is the Discretionary Thematic Index at +13.55% year-to-date, this after a +2.08% climb in September.

The HFR Cryptocurrency Index jumped +6.76% as crypto prices continued to rise (year-to-date +8.12%), while the HFRI Multi-Manager/Pod Shop Index added 1.1%, with positive contributions from all main strategy exposures, bringing year-to-date performance to +6.8%.

Performance dispersion widened in September, as the top decile of the HFRI FWC constituents advanced by an average of +12.2%, while the bottom decile fell by an average of -3.2%, representing a top/bottom dispersion of 15.4%. In August this was 12.9%, and in the trailing 12 months ending September 2025, it was 67.2%.

HFR says nearly 80% of hedge funds produced positive performance in September, in what was clearly a good month for the industry.

“Hedge funds posted a record surge in the third quarter, accelerating strong gains led by Systematic Macro and Equity strategies, with powerful risk on sentiment driven by lower interest rates, falling geopolitical risk, record equity levels, acceleration of M&A, and unprecedented strategic investment in AI development, capabilities and infrastructure,” says Kenneth Heinz, president of HFR. “Recent record performance gains on top of the record levels of global institutional capital invested in hedge funds has continued driving strong portfolio performance for an increasing range of institutional investors, including pension and sovereign wealth funds, family offices, as well as retail and individual investors. These record gains across the broad range of hedge fund strategies have contributed strongly to investor portfolio performance through the current risk on cycle but are also likely to reduce downside risk and volatility, with these also expected to drive record industry capital growth through year-end and into 2026.”