Global hedge funds posted one of their strongest monthly performances in more than a decade in April 2026, rebounding sharply from the March selloff as easing geopolitical tensions, renewed enthusiasm around technology and AI, and optimism surrounding IPO activity fueled a broad-based recovery across strategies.

The HFRI Fund Weighted Composite Index gained 4.8 percent in April, marking the strongest monthly advance since November 2020 and the second-largest monthly gain since May 2009, according to data released by HFR. The sharp reversal came after a difficult March and was driven primarily by Equity Hedge and Event-Driven strategies.

“Hedge funds delivered historic gains in April, fueled by easing geopolitical fears, rebounding tech and AI momentum, Fed leadership clarity, and optimism around a record IPO cycle,” said Kenneth J. Heinz, President of HFR. “The sharp rebound marked a dramatic reversal from the risk-off sentiment in March, though managers remain tactically positioned amid expectations of renewed market disruptions and volatility.”

Equity Hedge managers led the recovery, with the HFRI Equity Hedge (Total) Index surging 7.3 percent during the month, its strongest monthly return since November 2020 and the fourth-best monthly performance since the index’s inception in 1990. Technology-focused managers were the standout performers, as the HFRI EH: Technology Index soared 14.8 percent amid renewed investor enthusiasm for AI-linked companies and growth stocks.

The rebound in equities followed a volatile first quarter marked by concerns over inflation, slowing growth, and geopolitical tensions. However, sentiment improved materially in April after a ceasefire agreement between the US and Iran helped calm fears of a broader regional conflict. Strong corporate earnings and hopes for a more active IPO market also supported risk assets.

Event-Driven strategies also enjoyed a historic month. The HFRI Event-Driven (Total) Index jumped 5.2 percent, representing the second-strongest monthly gain in the strategy’s history. Special situations and activist managers led gains within the category, advancing 9.0 percent and 8.4 percent respectively.

The strong performance reflected growing expectations for increased merger-and-acquisition activity and a revival in public listings following a subdued period for capital markets activity. Multi-strategy event-driven funds also delivered solid gains, while distressed and restructuring managers benefited from improving credit conditions and corporate refinancing activity.

Macro managers produced more modest but still positive returns amid continued volatility across rates, currencies, and commodities. The HFRI Macro (Total) Index gained 1.8 percent in April, despite sharp reversals in oil prices and ongoing uncertainty surrounding monetary policy. Active Trading and systematic CTA strategies led the category, with the HFRI Macro: Active Trading Index rising 3.5 percent and the HFRI Macro: Systematic Diversified/CTA Index gaining 2.3 percent.

Systematic trend-followers have generally experienced a significantly improved environment in 2026 compared to last year, benefiting from persistent moves across equities, currencies, and commodities. According to HFR’s broader data, the HFRI Macro: Systematic Diversified Index is now up nearly 10 percent year-to-date through April.

Relative Value strategies also advanced in April, supported by stabilizing interest rates and improved clarity around Federal Reserve leadership. The HFRI Relative Value (Total) Index added 1.8 percent for the month, while convertible arbitrage and multi-strategy relative value funds were among the stronger contributors.

Beyond traditional hedge fund strategies, HFR also highlighted gains among liquid alternatives and cryptocurrency-focused funds. The HFR Cryptocurrency Index rose 4.2 percent in April, while the HFRX Market Directional Index advanced 8.2 percent.

The strong April recovery also masked a widening dispersion in manager performance. According to HFR, the top decile of hedge funds gained an average of 18.4 percent during the month, while the bottom decile declined by 4.1 percent, resulting in a dispersion of 22.5 percent between top and bottom performers. Approximately 85 percent of hedge funds generated positive returns during the month.

HFR also announced the launch of new Interval Fund Indices designed to track the performance of interval funds on both equal- and asset-weighted bases. The newly launched HFR Interval Funds Asset Weighted Index gained 3.4 percent in April and was up 2.4 percent year-to-date through May 5.

Despite the strong rebound, managers remain cautious heading into the remainder of the year. Inflation concerns, slowing economic growth, renewed geopolitical risks, and uncertainty surrounding the Federal Reserve continue to present challenges for investors. Still, April demonstrated hedge funds’ ability to capitalize on rapidly changing market conditions and elevated volatility across asset classes.

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