Hedge Funds on Track for Strong Performance Amid AI-Driven Growth
Global hedge funds are expected to deliver another strong year in 2026 as artificial intelligence (AI) continues to drive performance across most investment strategies. According to a Goldman Sachs report, first-half returns averaged 7%, surpassing the 10-year average of 4.1%. This marks six consecutive half-years where hedge fund returns exceeded their long-term norm and is second only in recent history to the volatile years of 2020 and 2021. Hedge funds have successfully adapted to AI-related opportunities, shifting exposures from semiconductors through data centers toward memory stocks. Investor demand has also surged, with nearly half of surveyed allocators planning to increase their hedge fund exposure in the second half of 2026. Goldman Sachs noted that net demand for hedge funds reached a record high and outperformed other alternative investments. Equity long/short strategies led performance, delivering an average return of 12.9% during the first half. Hedge funds have also consistently outperformed traditional '60/40' portfolios by about 250 basis points annually over five years.
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Topics: AI Goldman Sachs hedge funds returns