Hedge funds have attracted the most money in nearly 20 years as their collective assets top a record $5 trillion worldwide.
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Hedge funds, the vast majority of which are privately held, attracted $116 billion of net inflows last year, the most since 2007 and the third highest annual figure since the data started being tracked back in 1991. Hedge funds also grew by $527 billion through performance gains, market data shows.
The inflows and record assets under management show that interest in hedge funds remains strong as the stock market continues to boom. However, the hedge fund industry continues to underperform when returns are compared to leading stock indices.
Hedge Fund Performance
Information from Hedge Fund Research Inc. shows that the hedge fund industry returned 12.5% on average in 2025, the most in 16 years. However, last year’s return trailed the 17% gain achieved by the benchmark S&P 500 index.
“Uncertainty remains the dominant theme. Hedge fund managers are responding with flexible, tactical, and opportunistic strategies that can adapt as conditions change,” said Hedge Fund Research in a written statement. “As a result, investors continue to increase allocations to hedge funds, pushing capital beyond this historic milestone and fueling a growth trend that is expected to accelerate into 2026.”
Popular stocks among leading hedge funds include Nvidia (NVDA), Google parent company Alphabet (GOOGL), Amazon (AMZN), and retailer Walmart (WMT).
Is AMZN Stock a Buy?
AMZN stock has a consensus Strong Buy rating among 47 Wall Street analysts. That rating is based on 46 Buy and one Hold recommendations assigned in the last three months. The average AMZN price target of $294.93 implies 27.34% upside from current levels.
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