Hedge Funds Surge Amidst Market Volatility in 2025

Hedge funds recorded significant gains in 2025, with stock-picking funds achieving returns of 16.24%. Technology, media, and telecom-focused funds rose 13.5%, and healthcare funds saw a 27.2% increase. Despite volatility from U.S. trade policies, hedge funds benefited from AI-powered market rallies and surged through strategic leverage and stock positions.

In a year marked by volatility and uncertainty, hedge funds managed to achieve substantial gains in 2025. This success came against the backdrop of fluctuating markets impacted by U.S. trade policies. A Goldman Sachs report reveals that stock-picking funds saw returns of 16.24%, closely matching the benchmark S&P 500's 16.4% gain.

Technology, media, and telecom-focused funds posted a profit of 13.5%, while healthcare funds experienced a remarkable 27.2% rise, despite December's slight decline. Goldman Sachs data indicated that global long and short funds experienced a December return of 1.28%, thanks to strategic asset positions and concentrated short endeavors.

Furthermore, hedge funds capitalized on the AI-driven stock market rally, as systematic and quant funds averaged 19.11% gains for the year. With gross leverage reaching record levels, the funds achieved greater returns by leveraging trades, ultimately bolstering their standings regardless of geopolitical tensions and market fluctuations.

(With inputs from agencies.)