Hedge funds post biggest annual gain since 2009

Investing.com -- Hedge funds recorded their strongest annual performance in 16 years, with the industry delivering a 12.6% return across all strategy types in 2025, according to data from Hedge Fund Research (HFR).

This marks the best performance since 2009, when hedge funds gained nearly 20% during the aftermath of the Global Financial Crisis.

Stock-picking strategies and macro managers led the gains, both rising more than 17% for the year. The HFR Fund Weighted Composite Index advanced 1.56% in December, capping off the strong annual performance.

Healthcare-focused equity hedge funds were standout performers, finishing up 33.8%, while funds specializing in energy and basic materials rose 23.4%. These sector specialists capitalized on drug pricing themes, weight-loss treatments driving pharmaceutical stocks, and the ongoing rally in gold and silver.

Major industry players posted solid results, with Citadel’s flagship Wellington fund rising 10.2% and AQR Capital’s Apex multi-strategy vehicle gaining 19.6% for the year.

Only quantitative diversified funds finished in negative territory, ending the year down 0.65%. These computer-based strategies were caught off guard by April’s tariff-related volatility spike and November’s technology sector sell-off.

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