HEDGE FUND INDUSTRY REVIEW
Inside the July 2026 Hedge Fund Industry Report
The AI trade cracked. The index barely moved. Underneath, a nine-point gap between the best and worst strategies decided who kept their gains. Here's a preview of what's inside.
−1.10%
HFRI Composite
July · first loss since March1
−6.5%
Nasdaq-100 (QQQ)
July · AI complex reversed3
+2.08%
HFRI RV: Yield Alternatives
July · +18.4% YTD1
7.5 pts
Spread within Equity Hedge
Best vs worst, one month1, 2
IN THIS REPORT
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July Performance & the Risk-Adjusted Case
The Composite's first loss since March, the flat S&P that hid an AI-led drawdown, and why bonds failed to diversify again.
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The AI Trade Reversed
Thematic beta to fundamental alpha: SOXX's worst month since 2002, a record inflow, and the multi-strategy paradox it exposed.
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Real Assets Led, Bond Hedge Failed Again
Yield Alternatives and Macro Commodity gained while equities and bonds fell together — where the "40" was supposed to work.
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Manager Dispersion & Selection
A 58.6-point decile spread, a concentrated AI-fund unwind, and why this is a manager-selection business now.
SOURCES
Superscript numbers above refer to the numbered sources below. Full methodology notes and risk factors appear in the report.
- 1. HFR, HFRI Monthly Indices Flash Update, July 2026 (August 7, 2026) — Fund Weighted Composite, strategy, and single sub-strategy index returns. Flash Update estimates subject to revision.
- 2. HFR, HFRI Defined Formulaic Methodology, 2026 (v.2026.01.15) — Index construction and sub-strategy classification (section 2.2).
- 3. S&P 500 (SPY), Nasdaq-100 (QQQ) and Bloomberg U.S. Aggregate Bond Index (AGG) — Calendar-month total returns, dividends reinvested; fund-provider and Morningstar data.