HedgeCo.Net — Hedge funds administered by Citco attracted $36 billion of net inflows in the third quarter of 2026 even as they posted a weighted average return of minus 0.7%, according to Citco’s latest quarterly hedge fund report. The quarter followed a 12.3% gain in the second quarter, the strongest of the decade, and 53% of funds still finished the third quarter in positive territory. Year-to-date weighted average returns stood at 10.5% through September.
Dispersion by strategy was wide. Commodities funds led with an 11.9% quarterly gain and global macro returned 3.1%, the only major strategies in the black. Event-driven funds lost 3.8%, multi-strategy funds fell 1.4%, fixed income arbitrage declined 1.1% and equity strategies lost 1%. Year to date, global macro leads at 26.4%, followed by commodities at 14.3% and equities at 12.2%, while event driven is the only strategy in negative territory at minus 1.7%.
Flows did not follow the quarter’s performance. Multi-strategy funds took the largest share of new money at $15.4 billion, followed by hybrid funds at $12.3 billion and funds of funds at $5.7 billion. Third-quarter inflows came after $39.1 billion in the second quarter, bringing the year-to-date total to well over $100 billion.
Size continued to matter. Funds with more than $10 billion under administration attracted $24.9 billion of the quarter’s net inflows, and the largest managers remain ahead for the year with a weighted average return of 13.4%. Managers with $1 billion to $3 billion recorded the steepest quarterly decline at 2.1%. By region, the Americas accounted for $20.8 billion of allocations, Europe $13.8 billion and Asia $1.4 billion.
The data suggests allocators are buying diversification and platform scale rather than chasing the quarter’s winners. Multi-strategy funds drew the most capital despite a loss, while the strategies that actually made money, macro and commodities, captured a smaller share, a gap worth watching if fourth-quarter volatility persists.