Some major hedge funds recorded losses in October as a sharp technology selloff, government bond market turmoil, and election volatility triggered one of the broadest industry downturns since the Covid-19 pandemic, according to a report by Bloomberg.

Millennium Management's flagship multistrategy fund declined 2.3% during the month, while Marshall Wace's Eureka strategy fell 5.4%, reducing its year-to-date gain to 5.3%. ExodusPoint Capital Management lost 2.4%, Dymon Multistrategy declined 1.8% and equity-focused North Rock Capital fell 2.3%.

Credit-focused managers were also hit, with Arini Capital Management's flagship strategy down 12.1% through 23 October, putting it on course for its worst monthly performance on record. The losses reflect widespread pressure across equity, credit and macro strategies as crowded positions were disrupted by sharp market reversals.

Citadel was among the notable exceptions, with its flagship Wellington fund gaining 1.7% in October, lifting year-to-date returns to 15.3%. Quantitative hedge fund Quantedge also delivered strong performance, gaining 7.2% during the month and bringing its 2026 return to 60%, supported by commodity, fixed income and market-neutral strategies.

The market turmoil was driven by renewed concerns over AI-related valuations, rising sovereign bond yields amid political instability in France and sharp currency movements following Brazil's unexpected election outcome.

JPMorgan's positioning intelligence team described October as an exceptionally challenging period for hedge funds, with few strategies escaping the volatility. The divergence in performance highlights the difficulties facing highly leveraged multistrategy platforms during simultaneous market shocks, while some systematic and diversified strategies continued to generate positive returns.