Goldman Sachs reports hedge fund strategy rebound as AI‑driven trades wobble

Goldman Sachs says active‑extension strategies, often called 130/30 or “hedge‑fund‑lite,” have recovered to roughly $153 billion in assets by early 2026 after a painful drawdown in 2024 caused by volatility and rising rates. The sector now accounts for about 85 % of global active‑extension assets and posted double‑digit returns of 11.9 % in 2024 and 11.8 % in 2025.

At the same time, systematic hedge funds that focused on artificial‑intelligence‑related equities have seen their year‑to‑date performance fall to 10.8 % from a June peak of 14.4 % as crowded AI trades reversed. Losses were concentrated in U.S., Asian and European equities, especially semiconductor stocks. The unwind has reduced hedge‑fund leverage to its lowest level in a year, while discretionary managers continue to outperform with returns around 15.5 %.