Hedge funds had a good May. A really good May, actually. Equity-focused stock-picking strategies delivered returns of 5.35% during the month, outpacing the MSCI total return index’s 4.55% gain over the same period, according to a Goldman Sachs report released on June 5.

Not every big name crushed it, though. Steve Cohen’s Point72, which manages roughly $50.7B in assets, posted a more modest 2% gain for the month.

Here’s the thing about that MSCI comparison. Passive index investors earned 4.55% in May just by showing up. Hedge funds, with their higher fees and more complex strategies, need to meaningfully beat that number to justify their existence. A gap of 80 basis points in a single month does exactly that, especially when compounded over a full year.

Building on a strong 2025 foundation

Average industry returns in 2025 clocked in at approximately 11.8%. That’s the kind of number that makes allocators feel good about writing large checks. And feel good they did: more than 90% of hedge fund allocators reported that their portfolios met or exceeded expectations last year.

One notable absence from the May performance landscape is worth flagging: crypto and digital assets received zero mention in the reporting around hedge fund returns. While the crypto market has its own rhythms and opportunities, the traditional hedge fund world appears content to generate returns through conventional equity markets without venturing into digital assets in any significant way.