Macro, Commodity Funds Stand Out as HFs Slip in Q3

A volatile third quarter split the hedge fund industry into a few big winners and a broad group of modest losers. Funds betting on commodities and global macro trends profited from swings in energy prices and interest rates, while most other strategies lost ground. Yet investors kept writing checks, extending a year of strong inflows that continue to favor the largest managers, according to fund administrator Citco.

Hedge funds administered by Citco posted a weighted average loss of 0.7% in the third quarter, after a 12.3% gain in the second, though 53% of funds still finished in positive territory.

Commodities led with an 11.9% weighted average return and a 5.3% median return. Global macro gained 3.1% on a weighted basis, though its median fund lost 0.2%. Some individual funds have gained more than 50% through September.

Every other major strategy lost money. Event-driven funds fell 3.8%, multi-strategy funds 1.4%, fixed income arbitrage 1.1% and equity funds 1%.

For the year, global macro leads with a 26.4% weighted average return, followed by commodities at 14.3% and equities at 12.2%. The overall hedge fund average was 10.5%. Global macro’s 4.8% median return, however, points to wide dispersion between top performers and the rest.

Commodity trading picked up during the quarter. Commodity futures options volumes more than doubled in August from July, before futures activity eased about 8% in September.

Hedge funds drew $36 billion in net inflows in the quarter, down slightly from $39.1 billion in the second. Multi-strategy funds took in $15.4 billion and hybrid funds $12.3 billion, together about 77% of the total.

Funds with more than $10 billion in assets under administration captured $24.9 billion, about 69% of net inflows. The Americas accounted for $20.8 billion, Europe $13.8 billion and Asia $1.4 billion.

Net inflows for 2026 have topped $100 billion through September.