HFs Notch Broad-Based Gains in June as Equities, Macro Trades Fuel Momentum — Evening Brief – 07.21.25
Hedge funds delivered strong, broad-based performance in June, as all major strategy categories posted positive returns, buoyed by rising equity markets and directional opportunities in foreign exchange and commodities, according to PivotalPath’s latest hedge fund data. The firm’s industry-wide Composite Index advanced 1.8% for the month, bringing its year-to-date return to 3.8% through the first half of 2025.
Equity hedge funds led the way, with both the Equity Sector and Equity Diversified Indices climbing approximately 3%. Long/short managers capitalized on momentum trades, particularly in artificial intelligence and technology stocks, which surged on the back of better-than-expected earnings. The equity rally provided fertile ground for alpha generation across discretionary and quantitative styles alike.
Event-driven funds returned 2.2% in June, bolstered by increased M&A activity and capital structure arbitrage opportunities. Global macro managers gained 1.5%, aided by successful positioning on dollar weakness, G10 bond strength, and selective energy short trades. Notably, discretionary global macro strategies are the top performers of 2025 so far, surging 11.1% year-to-date, and standing alone as the only category to post double-digit returns through June.
Multi-strategy hedge funds rose 1.3%, continuing their steady ascent as diversified exposures paid off. Credit hedge funds and quant equity funds each gained 0.7%, with the latter continuing to demonstrate strong alpha generation, having produced 9.4% in alpha over the S&P 500 on a rolling 12-month basis—despite recent challenges from market reversals that undermined short books.
Even the CTA and managed futures sector, which has struggled amid trendless markets and erratic macro data in 2025, managed a modest 0.4% gain, as commodities—particularly in the metals and energy sectors—provided some much-needed directional moves.
PivotalPath’s data, which monitors the performance of more than 3,000 institutionally relevant hedge funds representing over $3 trillion in industry assets, showed that approximately 83% of tracked strategies posted positive returns in June, with an average gain of just over 3%.
Over the first six months of 2025, standout strategies included quant equity (+8.2%), equity diversified (+7.5%), event-driven (+5.2%), and volatility trading funds (+3.6%). These results reflect a favorable environment for active managers navigating earnings dispersion, cross-asset macro themes, and tactical event flows.
PivotalPath’s monthly “Point of View” commentary emphasized that while June was broadly profitable for hedge funds, persistent market volatility and shifting macro narratives mean that strategy flexibility and cross-asset agility remain essential for sustained outperformance in the second half of the year.