Prime Highlights:
- Equity long/short hedge funds performed very well in 2025, with healthcare-focused funds delivering the highest returns.
- Diversifying across sectors and strategies remains important as hedge funds stay linked to the overall stock market.
Key Facts:
- Healthcare hedge funds benefited from trends like weight-loss drug competition, Medicare price talks, and patent expirations.
- Other top-performing strategies included Asian equities (up 19%) and technology, media, and telecom stocks (up 17.5%).
Background:
Healthcare-focused hedge funds led gains in 2025. According to industry data provider PivotalPath, diversification across strategies and sectors remains crucial as hedge funds remain closely correlated with broader stock markets.
Healthcare, media and telecom companies, and Asian equities were among the best trades for hedge funds this year, with just two weeks left in the calendar. PivotalPath’s Equity Sector Index, which tracks funds across multiple sectors, rose 22.7% through November.
Healthcare hedge funds did very well this year, thanks to competition over weight-loss drugs, Medicare price talks, and expiring patents at major pharmaceutical companies. These trends gave fund managers good chances to make profits.
Other successful strategies included Asian equities, which rose 19%, and technology, media, and telecom stocks, up 17.5%. Event-driven funds gained 12.1%, multi-strategy funds rose 9.2%, and the Global Macro Index increased 8.6%.
PivotalPath warned that hedge funds are still tied to the stock market, which could be risky if it drops. Michaël Lok of Union Bancaire Privée said diversifying across sectors and strategies helps reduce risk.
Healthcare hedge funds have more chances to grow, with Rhenman & Partners pointing to a strong IPO pipeline, good prices, and supportive regulations in 2026.