Hedge Funds outperform benchmark in H1 2026
Long/short Equity Hedge Funds Led Returns with 7% YTD
NEW YORK, LONDON, September 10, 2026 – Global hedge funds outperformed their S&P 500 60% Exposure benchmark in H1 2026, according to new data from Canoe Intelligence, the platform for smarter alternatives management.
The Canoe Hedge Fund Report Q2 2026 found that the Canoe Total Hedge Fund Index, which tracks performance across over 3500 hedge funds and all strategies, returned 6% year-to-date in H1 2026. Outperformance was driven by long/short equity strategies (EQLS), which returned 9% in H1 2026, the strongest performance of any strategy so far this year and the primary driver behind the Canoe Total Hedge Fund Index’s positive performance. Equity strategies make up more than half (51%) of the index.
Credit strategies returned 3% YTD, on track to surpass their full-year 2025 return of 5% and broadly in line with recent history (5% in 2025, 6% in 2024 and 7% in 2023), despite the asset class’s declining performance every year since 2023. Private credit strategies, in particular, look set to underperform the wider hedge fund market by their widest margin since 2023. At H1 2026, private credit strategies lagged the Canoe Total Hedge Fund Index by 4% YTD, with volatile bond markets creating opportunities for other credit strategies to outperform. Private credit strategies experienced low dispersion in H1 2026 with a majority of credit-focused funds returning less than 3% YTD.
Relative value, multi-strategy, event-driven and macro strategies all underperformed the benchmark over the period, reflecting a mix of uncertainty favoring broader markets and diverging strategy performance. Multi-strategy funds fared comparatively well, returning 5% YTD, slightly above their historical average, while relative value strategies also returned 5% YTD, likewise ahead of their historical average.
Mike Muniz, Chief Strategy Officer, Canoe Intelligence, said: “H1 2026 was anything but linear. We experienced a sharp pullback in the spring, then an equally sharp rebound. What stands out in our data is that the funds protecting capital through the drawdown weren’t always the same funds capturing the rebound. That’s exactly the kind of manager-level distinction allocators need to see, and it’s only visible because we’re tracking actual fund performance, not aggregate estimates.”
The full Q2 2026 Canoe Hedge Fund Performance Report is available here.
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