Macro Leads Hedge Fund Surge to Start 2026

Macro funds took advantage of volatile trading conditions to start the year by leading hedge funds strategies in January, according to indexation and analytics firm HFR.

The headline HFRI Fund Weighted Composite (FWC) Index rose for the ninth consecutive month, by 3% alone in January, this follows a 2025 return of +12.4%, the highest since 2009. Best performer was the HFRI Macro (Total) Index, at +4.84%, thanks to every sub-strategy index save for currency traders, who suffered at the hands of the market’s gyrations, ending January -0.23%. This is the highest monthly return by this index since May 2003.The Commodity Index led the way, unsurprisingly perhaps given the surge in precious metals, rising 6.18%, and, pleasingly for the sector, systematic funds showed they could make money in volatile markets after suffering through much of 2025.

The HFRI Macro Systematic Directional Index was +5.01% in January, slightly outpacing its discretionary peer, which was +4.72%. Highlighting that trend followers more generally did well, the Trend Following Directional Index was +4.6%. There were solid, but lower, returns for Multi-Asset Class funds at +3.47%, as well as for Active Traders, at +3.76%.

Equity Hedge Funds also did well, at +3.15%, while the HFRO Relative Value (Total) Index was +1.2% to start the year. As expected, given the fall in prices, the HFR Cryptocurrency Index, fell 9.9%.

Performance dispersion expanded significantly in January, as the top decile of the HFRI FWC constituents advanced by an average of +14.8%, while the bottom decile of constituents fell by an average of -4.4%, a top/bottom dispersion of 19.2% for the month. In December this was 11.2%, and for the trailing 12 months ending January 2026, it was 84.2%, largely thanks to the top decile returning 73.1%. HFR says approximately 80% of hedge funds produced positive performance in January.

“Macro hedge funds accelerated historic gains to lead industry performance through the end of 2025 and into 2026, with performance driven by a range of factors including both energy and commodity market reaction to evolving geopolitical situations in Iran and Venezuela, as well as the nomination of Kevin Warsh as the candidate for chairman of the US Federal Reserve,” says Kenneth Heinz, president of HFR.  “The nomination of Kevin Warsh, with his extensive financial markets experience and Macro hedge fund background, is likely a strong catalyst for hedge fund and Macro performance in 2026. With heightened economic policy tension between the desire for stimulus of lower interest rates, persistent inflationary pressures and ongoing concerns about the AI impact on future employment markets, it is likely that a more predictable approach to monetary policy could be beneficial for managers focused on identifying and positioning for traditional macro drivers of performance, making Macro hedge funds an exciting area of industry performance leadership in 2026.”