Hedge fund performance: June 2025 snapshot

Hedge funds delivered a solid performance in June 2025, buoyed by a broad rally in global equities and easing macroeconomic uncertainty. Most strategies posted positive returns, benefiting from stronger risk sentiment, particularly in U.S. and European markets.

Monthly returns by strategy

According to HFR, the HFRX Global Hedge Fund Index rose +0.54% in June, bringing its year-to-date (YTD) gain to approximately +2.2%. Strategy-level performance was generally positive:

• Macro strategies gained +0.83%, supported by favorable trends in rates and commodities.
• Equity Hedge strategies advanced +0.70%, in line with rising equity benchmarks.
• Relative Value Arbitrage returned +0.44%, aided by tighter spreads and stable volatility.
• Event-Driven strategies posted a more modest +0.31%, reflecting mixed deal flow and corporate actions.

Meanwhile, the HFRI-I Liquid Alternative UCITS Index rose +0.86% through mid-June, indicating continued appetite for liquid hedge fund-like exposures among European investors.

The broader market backdrop played a significant role in supporting returns. The S&P 500 gained over 5% in June, driven by improving economic data, resilient corporate earnings, and reduced fears of aggressive central bank tightening. Volatility remained contained, which benefited systematic and relative value strategies.

With many hedge funds now positive for the year, the second half of 2025 will likely hinge on how managers navigate a still-uncertain macro environment. Key risks include global geopolitical tensions, inflation persistence, and election-driven volatility in major economies.

Still, performance dispersion remains high, suggesting that manager selection continues to be critical in differentiating outcomes across hedge fund strategies.

Ref: Business Insider. (2025, July 1). Hedge fund mid-year returns: How major funds performed in 2025 so far. HFR. (2025, June). HFRX Indices Mid-June 2025 Performance Notes. LPL Financial. (2025, June 28). Larger hedge funds dominate in volatile 2025 market.