By Nell Mackenzie and Anirban Sen
LONDON (Reuters) -Hedge funds including stock traders have returned more than 13% in 2025 to the end of October, just ahead of many of the biggest multi-strategy hedge funds, according to a Goldman Sachs report and sources familiar with each of the funds.
In October, hedge fund stock pickers returned 1.75%, underperforming a 2.3% rise in the S&P 500 index.
Crowded trades, investments with a focus on health care and technology stocks, and volatility added to the positive returns, Goldman Sachs said in a November 3 client note.
Hedge funds bought into global equities for a second straight month, as they continued to be bullish on single stocks on a long-term basis, the report added.
Technology was the best-performing sector in October, with tech, media and telecom (TMT)-focused funds up 2.1% during the month, while healthcare-focused funds posted positive returns for the fifth straight month and jumped 8.4% in October.
Since then, however, tech stocks have come under pressure and tech-heavy stock markets were on Friday heading for their biggest weekly fall in seven months.
October proved to be a challenging month for systematic funds and quant funds, partly due to exposure to short bets.
Macro funds including those trading with systematic strategies broadly generated better returns last month, according to an executive at one of Wall Street’s top three prime brokerages, who requested anonymity to discuss confidential client returns.
Trades wagered at a bigger size, and bets made in the U.S. and China resulted in losses for both stock pickers and systematic funds, Goldman said.
Some of the biggest multi-strategy hedge funds including Citadel, Millennium Management and Balyasny Asset Management also posted gains in October, according to people familiar with the matter.
(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Paul Simao)
Comments