Hedge Funds Post Best H1 Returns Since 2021

Hedge funds returned an average of 7.2% through June 30, 2026, marking the strongest first half for the industry since 2021, according to data from research firm PivotalPath. Technology-focused managers led performance, with an average return of about 27% driven by gains in semiconductor shares and firms tied to artificial intelligence.

The industry recovered after a sharp market selloff in March. That volatility followed conflict involving Iran that disrupted shipping through the Strait of Hormuz, pushed oil prices higher and raised inflation concerns. Earlier in the year, fears that AI would upend established software businesses had triggered a sector selloff that weighed on some hedge fund portfolios.

Several large managers posted notable results. Marshall Wace’s Eureka fund gained 6.7% in June, bringing its first-half return to 19.9%, according to people familiar with the matter. D.E. Shaw’s macro-focused Oculus fund rose 5.6% in June and was up 27.4% for the year through June. At Millennium Management, two teams that trade index rebalancing and related events generated about $3.7 billion in June, helped by the accelerated inclusion of SpaceX in Nasdaq and FTSE Russell benchmarks.

Specialist and concentrated funds produced outsized returns. Whale Rock Capital Management returned 72.5% in the first six months, driven mainly by semiconductor positions and a stake in Anthropic. Appaloosa Management posted roughly 32% gains, largely from exposure to memory-chip companies that rallied on rising demand for AI computing infrastructure.

PivotalPath’s figures also show hedge funds have produced annualized returns of 8.5% since January 2020, a period in which some other alternative asset classes, including private equity, recorded lower returns. The first-half results combined technology-led gains with event-driven trading, including profits tied to index rebalancing, that supported overall performance.