Hedge funds experienced positive returns in January, capitalising on market volatility spurred by events such as U.S. military action in Venezuela, uncertainty surrounding the Federal Reserve’s independence, and a severe cold snap that dramatically increased natural gas futures. According to a JPMorgan client note seen by Reuters, global hedge fund performance rose by 2.2% in January. This compares favourably to the 2.5% returns seen the previous year, when hedge funds benefited from U.S. equity positions and effectively navigated a selloff triggered by the rise of the Chinese AI model DeepSeek. JPMorgan Chase & Co. is a global financial services firm. The company offers investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management.
Global equity long/short strategies delivered a 2.7% gain, while multi-strategy hedge funds returned between 1.6% and 3.2%. Quantitative hedge funds, however, were likely down around 1% in aggregate. January saw significant geopolitical and economic developments. The U.S. captured Venezuelan President Nicolas Maduro on January 3, after which the two countries agreed to a deal exporting up to $2 billion of Venezuelan crude to the U.S.
Investors increased their positions in higher long-dated Treasury yields and a steeper yield curve following the announcement of Kevin Warsh as President Donald Trump’s pick to lead the Federal Reserve. Separately, natural gas futures surged 140% between January 20 and 28 due to extreme cold in the United States, which drove heating demand to near-record levels.
These factors provided hedge funds with ample trading opportunities. Major multi-strategy funds, including Balyasny, Citadel, and Point72, reportedly returned between 1% and 3%. Citadel and Point72 declined to comment on the reported numbers.
