Global macro and commodities were the only major hedge fund strategies to post positive returns in the third quarter, with some individual funds reporting gains exceeding 50% through September, according to industry data.
While hedge funds administered by Citco posted a weighted average loss of 0.7% in the third quarter, following a 12.3% gain in the second quarter, 53% of funds still finished in positive territory, according to the fund administrator’s third-quarter hedge fund report.
Commodities led quarterly performance with an 11.9% weighted average return and a 5.3% median return. Global macro followed with a 3.1% weighted average gain, although its median return was negative 0.2%, indicating that returns were concentrated among a subset of funds.
Other strategies finished the quarter in negative territory, with event-driven funds losing 3.8%, followed by multi-strategy funds at negative 1.4%, fixed income arbitrage at negative 1.1% and equities at negative 1%.
Year-to-date performance tells a different story. Global macro ranked first among the strategies tracked by Citco through September, with a weighted average return of 26.4%, followed by commodities at 14.3% and equities at 12.2%. The overall hedge fund weighted average return was 10.5%.
Global macro’s year-to-date median return was 4.8%, considerably below its weighted average, reflecting the dispersion in performance across funds.
Oil and gold
Citco also reported changes in commodity trading activity during the quarter. In July, commodity and equity derivative volumes rose 17% from June levels. In August, commodity futures options more than doubled month over month, while commodity futures trading increased 9%. Commodity futures activity eased in September, declining roughly 8% from August.
Stockholm-based Lynx Asset Management offers an example of the returns generated by commodity-oriented trading strategies this year. Its Lynx Program gained 25.9%, net of fees, in the first half of 2026.
In its midyear review, the firm said energy markets led performance amid the ongoing conflict between the U.S. and Iran and subsequent global energy supply shocks. The escalation also prompted a shift toward gold as a safe-haven asset, according to Lynx. Inflation expectations rose during the first half of the year as the dollar strengthened.
According to HSBC, Lynx Asset Management’s Lynx Bermuda 1.5, a managed futures fund with more than $300 million in assets, gained 53.06% year to date through September.
PivotalPath also reported that managed futures moved into first place among strategies for 2026 in September following a second month of gains. The PivotalPath Managed Futures Index rose 3.8% in September, bringing its year-to-date return to 13.8%. September marked the index’s highest monthly return since February 2024.
Investor inflows
Despite global macro’s performance gains, investor inflows into the strategy were minimal as capital continued to flow toward multi-strategy and hybrid funds.
Hedge funds recorded $36 billion in net inflows during the third quarter, compared with $39.1 billion in the second quarter, according to Citco. Subscriptions totaled $75.9 billion, exceeding investor redemptions.
Multi-strategy funds attracted $15.4 billion in net inflows, while hybrid funds received another $12.3 billion. Together, the two categories accounted for roughly 77% of the quarter’s net inflows. Funds of funds attracted an additional $5.7 billion.
Larger hedge funds continued to capture the majority of investor allocations. Funds with more than $10 billion in assets under administration attracted $24.9 billion in net inflows, representing about 69% of the quarterly total.
Regionally, the Americas accounted for $20.8 billion in net inflows, followed by Europe at $13.8 billion and Asia at $1.4 billion.
The third quarter extended a trend of positive investor flows throughout 2026. Citco reported that hedge funds had attracted well over $100 billion in net inflows through September, despite the decline in overall performance during the third quarter.
The divergence between performance and investor allocations underscores the continued concentration of capital in multi-strategy and hybrid platforms, even as global macro and commodities lead the industry’s returns.
