(HedgeCo.Net) The hedge-fund industry delivered strong performance through October 2025, with many firms posting double-digit year-to-date returns, though the month itself showed some divergence across strategies. According to a recent report from Goldman Sachs Group Inc. and other market sources, hedge funds (including equity traders) returned more than 13% for the year to end-October. Reuters

More specifically:

• The average stock-picking hedge fund returned about 1.75% in October — slightly below the 2.3% gain in the S&P 500. Reuters
• Some strategies out-performed more significantly; others lagged — underscoring that “hedge fund” is a broad category with wide dispersion of outcome.
• The aggregate performance index — the SS&C GlobeOp Hedge Fund Performance Index — reported a flash estimate of +1.42% gross for October, and a YTD of +12.75%. Business Wire

What’s fueling the results

• Markets in 2025 have shown both opportunity and risk: technology, AI-driven names, new waves of macro volatility, etc. Hedge funds that navigated this environment well — via nimble stock-picking or alternative strategies — have been rewarded.
• The low correlation of many hedge funds to vanilla equity benchmarks (the SS&C index reports ~25-30% correlation) suggests they’re still offering differentiation. Business Wire
• At the same time, the underperformance of some quant strategies and the lagging of some managers indicates the need for selective allocation rather than blanket exposure.

Implications for investors & advisers

• For investors: Seeing double-digit YTD returns is encouraging, but one must be cautious. Performance in a strong market may not reveal how funds perform under stress.
• For advisers: It’s a good time to revisit hedge fund allocations, check whether managers are genuinely delivering differentiated exposures (not just equity dress-up), assess fees vs outcome, and stress-test: what if markets turn?
• For fund managers: The environment is competitive. Dispersion is high; scale may matter; differentiation may matter more.

Takeaway

Hedge funds are having a generally good 2025 so far, but outcomes are far from uniform. The month of October delivered modest gains on average, reinforcing that investor selection remains critical. With markets still evolving, the next few months will test whether current performance can be sustained.