---

HFRI Energy Basic/Materials Index jumps +5.2 percent in December;

Macro leads strategy performance for month, HFRI Commodity Index up +4.3;

Healthcare funds add +0.4 percent in December, up +45.8 percent since June

CHICAGO, (January 8, 2026) – Hedge fund performance accelerated in December to conclude a strong 2025, driven by gains across Macro and Equity Hedge funds, as risks and opportunities evolved into the new year across geopolitical, energy, AI/technology and cryptocurrency markets. The HFRI Fund Weighted Composite Index^® (FWC) gained +1.6 percent in December, advancing for the eighth consecutive month, led by Macro commodity, trend-following and Energy funds, as reported today by HFR®, the established global leader in the indexation, analysis and research of the global hedge fund industry. Inclusive of the December gain, the FWC surged +12.6 percent in 2025, the strongest calendar year of performance in 16 years (2009).

Accelerating the trend from early 4Q25, hedge funds again successfully navigated an increasingly intense range of risk-on and risk-off factors driving performance in December. In addition to AI spending and valuation risks and opportunities, managers positioned for recurring interest rate uncertainty, while also navigating increased geopolitical risk, including both Energy and Emerging Markets exposures into 2026.

Driven by commodities, equities, and trend-following exposures, the HFRI Macro (Total) Index advanced +1.9 percent in December, extending its positive performance streak to seven months, gaining +9.9 percent over that period. Macro sub-strategy performance in December was led by the HFRI Macro: Commodity Index, which jumped +4.3 percent, the HFRI Macro: Multi-Strategy Index, which gained +2.8 percent, and the HFRI Macro: Systematic Diversified Index, which added +1.5 percent for the month. For the full year 2025, the HFRI Macro (Total) Index advanced +7.2 percent, while the HFRI Macro (Asset Weighted) Index gained +6.9 percent.

Equity Hedge (EH) funds, which invest long and short across specialized sub-strategies, led strategy performance for 2025, driven by Healthcare, Energy, and Multi-Strategy sub-strategies. The HFRI Equity Hedge Index gained +1.8 percent in December to conclude 2025 up +17.3 percent, the strongest annual gain for the Index since 2020 and the 2^nd strongest gain since 2009. EH sub-strategy performance in December was led by the EH: Energy/Basic Materials Index, which surged +5.2 percent, bringing its FY 2025 return to +23.4 percent, the strongest annual performance since 2021. The HFRI EH: Healthcare Index ended the year on a seven-month winning streak, surging +45.8 percent from June through December, ending calendar year 2025 up +33.8 percent, the strongest annual performance since inception, while also leading all sub-strategies in 2025. The HFRI Multi-Manager/Pod Shop Index added +1.1 percent in December, bringing full year 2025 performance to +9.7 percent.

Event-Driven (ED) strategies, which often focus on out-of-favor, deep value equity exposures and speculation on M&A situations, also advanced in December, driven by expectations for a strong M&A environment in 2026, with an increased focus on AI-related technology and infrastructure opportunities. The HFRI Event-Driven (Total) Index gained +1.5 percent in December, led by the HFRI ED: Activist Index, which jumped +5.5 percent, and the HFRI ED: Credit Arbitrage Index, which added +1.9 percent. For FY 2025, the HFRI Event-Driven (Total) Index gained +11.0 percent, its strongest year since 2021.

Fixed income-based, interest rate-sensitive strategies also gained to conclude 2025, as managers positioned for uncertainty regarding both inflation and economic growth into 2026, as well as leadership/policies at the US Federal Reserve. The HFRI Relative Value (Total) Index returned an estimated +0.5 percent for the month, bringing 2025 performance to +7.5 percent. RVA sub-strategy performance for December was led by the HFRI RV: Fixed Income-Sovereign Index, which gained +1.0 percent, while FY 2025 performance was led by the HFRI RV: Convertible Arbitrage Index, which jumped +10.5 percent over the year.

Liquid Alternative UCITS strategies also advanced in December, as the HFRX Global Index gained +0.58 percent, while the HFRX Equal Weighed Index added +0.66 percent for the month. For December, HFRX main strategy performance was led by the HFRX Macro/CTA Index, which advanced +1.3 percent, while FY 2025 performance was led by the HFRX Equity Hedge Index, which returned +10.1 percent.

Hedge fund performance dispersion remained steady in December, as the top decile of the HFRI FWC constituents advanced by an average of +8.9 percent, while the bottom decile of constituents fell by an average of -3.8 percent, representing a top/bottom dispersion of 12.7 percent for the month. By comparison, the top/bottom performance dispersion in November was 12.6 percent. For the full calendar year 2025, the top decile of FWC constituents gained +62.7 percent, while the bottom decile declined by an average of -12.8 percent, representing a top/bottom dispersion of 75.5 percent. Approximately three-quarters (75%) of hedge funds produced positive performance in December.

“Hedge funds posted the strongest calendar year of performance since 2009, led by broad-based gains across all strategies and driven by strong momentum in AI technology investment, spending and infrastructure build – a dominant, powerful trend which has accelerated into 2026. In addition to this powerful risk-on sentiment, hedge funds also navigated volatile and complex risk-off market cycles throughout the year, including the Liberation Day historic volatility spike, a sharp correction in the cryptocurrency market, and reversals of AI sentiment driven by concerns about valuation and sustainability of AI investment and spending,” stated Kenneth J. Heinz. “Through these oscillating cycles of risk-on and -off sentiment, hedge funds generated strong performance with significant contributions from a wide range of exposures and strategies throughout the year, including Healthcare, Technology, Convertible Arbitrage, Discretionary Macro, Commodities, Systematic Quantitative, Shareholder Activist and Energy sub-strategies. The impact of these diverse engines of performance highlights the sophisticated nature of the modern hedge fund industry to deliver uncorrelated performance gains across a wide range of financial market environments. Institutions and individual investors looking for access to these important exposures are likely to accelerate industry capital growth to historic records in 2026.”

 

NOTE: December 2025 index performance figures are estimated as of January 8, 2026