Global macro strategies led the pack once again. They produced a weighted return of 6.5% for the month, building on their dominance throughout 2025. Commodities trading followed with 2.2%. Fixed income arbitrage brought up 0.7%.

Fund size played a role in results. Smaller funds with less than $200 million in assets under administration averaged 1.4%. That topped the field. Larger funds over $3 billion AUA, which ruled 2025 performance, managed just 0.7%.

Dispersion among individual funds widened sharply. The gap between top and bottom performers hit 9.9 percentage points. December’s spread stood at 6.6 points. Officials at Citco said this suggests markets increasingly hinge on company-specific drivers, even as global macro holds sway.

Capital flowed in steadily. Net inflows reached $6.9 billion for January, fueled by $16 billion in subscriptions. Multi-strategy funds grabbed the lion’s share at over $3.3 billion. Equities strategies took $2.4 billion. Fund of funds pulled in $1 billion.

Multi-strategy appeals for its flexibility, Citco noted. Managers shift capital dynamically to match shifting market conditions and manage risk.

Europe led regional inflows with $4.6 billion. The Americas drew $1.5 billion. Asia managed $0.8 billion. Citco pointed to ed European equities versus U.S. stocks as a draw.

Allocator sentiment backs the optimism. The Hedgeweek AIMA Allocator Sentiment Report for H1 2026 showed 71% confidence in hedge fund portfolios, up from 52% in the prior half-year. Most expect to hit return targets. Yet deployment stays cautious: 59% held allocations steady.

Investors show willingness to pay up for targeted strategies. That aligns with growing performance gaps across funds, per Citco’s data.

January’s results come amid choppy global markets. Central banks held rates steady in many regions. U.S. equity indices climbed modestly. Bond yields ticked higher in spots.

Citco tracks over 2,200 funds with $850 billion in AUA. The administrator bases its index on actual traded returns, not self-reported data. That method captures real performance, the firm says.

Global macro’s edge reflects bets on interest rates and currencies. Top performers rode central bank signals and geopolitical shifts. Smaller funds benefited from nimble positioning in niche trades.

Inflows signal sustained interest. Multi-strategy’s haul highlights demand for diversified approaches. Europe’s pull highlights value hunting after U.S. rallies.

Allocators balance confidence with prudence. Higher conviction hasn’t sparked aggressive moves. Many wait for clearer economic signals.

Fee tolerance rises for high-conviction strategies. Performance divergence justifies the premium, Citco analysts said. Top-quartile funds outpaced the median by wide margins.

The report highlights hedge funds’ resilience. Ten months of gains buck broader market volatility. Investors eye February for continuity amid policy uncertainties.