- - The hedge fund strategies investors desire most in 2026 — and the 3 charts that show why

Alex MorrellFebruary 2, 2026 at 2:54 AM

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ANGELA WEISS / AFP via Getty Images -

Hedge funds are the most sought-after asset class heading into 2026, according to Goldman Sachs.

Quantitative and discretionary macro strategies are particularly hot among allocators.

Systematic macro, on the other hand, has faltered.

Hedge funds are more in demand than ever.

For the second year in a row, hedge funds — the group of firms including Citadel, Millennium, D.E. Shaw, and Bridgewater — are the most sought-after asset class, according to Goldman Sachs' prime services industry outlook report. The group's lead over private equity, private credit, venture capital, and other alternatives reached an all-time high, according to the bank's data.

"Almost half of allocators plan to increase their allocation to hedge funds in 2026, compared to just 4% who plan to trim their allocation," Goldman said in the report.

But demand isn't evenly spread across strategies. Some hedge fund approaches are far more coveted than others heading into 2026.

Goldman Sachs

Quantitative trading strategies — which rely on computer models and algorithms rather than human judgment — are the most in-demand strategy, according to Goldman's survey of more than 300 hedge fund allocators. On net, 23% of allocators said they plan to increase exposure to quant funds.

Discretionary macro strategies ranked close behind, with 21% of allocators planning to add exposure. Those funds make human-driven bets on global economic trends across markets like interest rates, currencies, and commodities.

Quants have led the pack over the past five years.Goldman Sachs

Both strategies delivered solid performance in 2025 and offer diversification from equity-heavy portfolios, particularly after another strong year for stock markets. The rising demand suggests "allocators remain focused on adding uncorrelated exposure to their hedge fund portfolios," Goldman said.

Despite bouts of market turbulence in July and October, quantitative funds gained 10.5% in aggregate last year. Firms including Qube Research, D.E. Shaw, and AQR posted standout results.

Over the past five years, quant strategies have been the best-performing hedge fund category, according to Goldman's data, and they have dominated fundraising. Quant funds accounted for more than 70% of the industry's $78 billion in net inflows in 2025 — their second consecutive year leading by a wide margin.

When it comes to fundraising, quant strategies have dominated over the past two years.Goldman Sachs

Discretionary macro strategies typically thrive during periods of economic and geopolitical volatility. Tariff tensions, shifting interest-rate expectations, and geopolitical flare-ups helped drive returns in 2025, and many investors see similar conditions ahead in 2026.

Macro funds gained 11.5% overall last year, with firms like Bridgewater, Element, and Rokos posting returns above 20%. Demand could remain strong as President Donald Trump continues to publicly pressure the Federal Reserve to cut interest rates.

Not all macro strategies have fared as well. Systematic macro funds and commodity trading advisors — automated strategies that trade global futures markets — struggled in 2025 and over the past five years, with gains of just 0.5% and 5.3%, respectively.

Unsurprisingly, they are the least popular strategies among allocators heading into 2026.

on Business Insider

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Source: “AOL Money”