Hedge funds on track for another stellar year on AI boom

Global hedge funds are on track for another standout year, with returns boosted in the first half by an artificial intelligence-fueled risk rally, according to a Goldman Sachs note to clients seen by Reuters. Hedge funds averaged 7% in the first six months of 2026, versus a 10-year average of 4.1%, and outperformed their long-term benchmark for the sixth consecutive half-year period. Goldman attributed strength to equities offsetting softer fixed income, helping a 60/40 passive portfolio return 5.7%. Demand also surged: in a survey of 341 allocators managing over $1.5 trillion, nearly half planned to increase exposure, while only 3% expected to cut it.