May 2026: How I Know First AI Outperformed $100B+ in Hedge Fund Capital
May 2026: How I Know First AI Outperformed $100B+ in Hedge Fund Capital
Combined Long/Short Strategy | May 2026 Monthly Performance Report
- I Know First Combined Long/Short Strategy: +7.04% in May 2026
- S&P 500: +5.15% in May 2026 | Outperformance: +1.89%
- vs Hedge Funds: Beat Schonfeld Fundamental Equities (+3.4%), Millennium (+2.4%), Point72 (+2.0%), Citadel Wellington (+1.43%), and Balyasny (+1.4%) by 3.64 to 5.64 percentage points
- 2026 YTD: I Know First +18.07% vs S&P 500 +10.73% | Outperformance: +7.34%
- Since Inception (January 2020): I Know First +759.62% vs S&P 500 +131.57%
Market Context: May 2026
May 2026 marked a month of measured recovery across global equity markets. After April’s dramatic tariff-driven volatility, investors found firmer footing as the 90-day pause on reciprocal tariffs remained in place and corporate earnings continued to deliver upside surprises. The S&P 500 added +5.15% over the month, building on its April recovery and carrying the index to fresh year-to-date highs.
The macro backdrop in May was shaped by three key forces: continued trade negotiation optimism between the United States and major partners, a Federal Reserve that held rates steady while signaling patience, and a technology sector that retained its AI investment thesis through a string of strong quarterly results. Consumer discretionary and communication services led sector performance, while utilities and energy lagged as risk appetite remained tilted toward growth.
Multi strategy hedge funds, navigating these crosscurrents with their characteristic discipline and risk limits, participated in the recovery but meaningfully trailed the broader market. I Know First’s directional algorithm, positioned long across its highest-conviction names, captured the month’s upside with greater efficiency. The result: a +7.04% gain that outpaced every primary fund in our comparison set and beat the S&P 500 by nearly two percentage points.
How I Know First Stacked Up Against $100B+ in Hedge Fund Capital
The multi strategy sector continued to trail the broad market in May. These platforms operate under tight risk limits, diversified pod structures, and systematic drawdown controls, which compress both their downside and their upside. In a month where equity markets moved broadly higher, that architecture again limited their participation relative to a fully committed directional strategy.
The following figures reflect confirmed May 2026 performance for the five largest multi strategy platforms tracked in our monthly analysis:
| Fund | May 2026 Return | 2026 YTD | Source |
|---|---|---|---|
| I Know First Combined Long/Short Strategy | +7.04% | +18.07% | I Know First AI Algorithm |
| Schonfeld Fundamental Equities | +3.40% | +8.40% | Reuters, June 2026 |
| Millennium Management | +2.40% | +6.10% | Reuters, June 2026 |
| Point72 | +2.00% | +10.50% | Reuters, June 2026 |
| Citadel Wellington Fund | +1.43% | +3.84% | Reuters, June 2026 |
| Balyasny Asset Management | +1.40% | +0.60% | Reuters, June 2026 |
| S&P 500 | +5.15% | +10.73% | I Know First tracking |
Source: Reuters (June 2026) for hedge fund figures. I Know First figures from proprietary AI algorithm, from April 30, 2026 up until May 29, 2026.
Cumulative Performance Since Inception
The May result extends a track record that now spans more than six years. Since the strategy’s inception in January 2020, the I Know First Combined Long/Short strategy has returned +759.62% cumulative, compared to +131.57% for the S&P 500 over the same period. That represents a cumulative outperformance of more than 628 percentage points achieved through a fully systematic, AI-driven process with no human discretion at the portfolio level.
The strategy has sustained this edge through multiple distinct market regimes: the COVID crash and recovery of 2020, the bull market of 2021, the rate-driven bear market of 2022, the AI-fueled rally of 2023 and 2024, and the geopolitical and tariff volatility of 2025 and 2026. The algorithm’s directional discipline, which avoids hedging costs and commits fully to either long or short positioning each rebalance cycle, has been the central driver of that compounding advantage.
Risk Adjusted Performance: I Know First vs S&P 500 (Since Inception)
| Metric | I Know First | S&P 500 |
|---|---|---|
| CAGR | +40.48% | +14.19% |
| Annualized Volatility | 20.05% | 17.28% |
| Sharpe Ratio (Rf = 4%) | 1.82 | 0.59 |
| Sortino Ratio (Rf = 4%) | 3.52 | 0.95 |
| Maximum Drawdown | -17.20% | -33.92% |
Source: I Know First AI Predictive Algorithm, from January 29, 2020 up until May 29, 2026. Risk free rate: 4% per annum. Volatility annualized as monthly standard deviation multiplied by the square root of 12.
Why the Algorithm Outperforms
The I Know First algorithm processes thousands of market signals simultaneously, identifying non linear patterns that human analysts cannot detect at scale. Each rebalance cycle reflects the output of a model trained on decades of market data across more than 13,500 assets.
The algorithm continuously evolves its trading rules across thousands of candidate strategies, selecting those with the highest survival fitness. This ensures the model adapts to changing market regimes without human intervention or discretionary override.
Signals are validated across six time horizons simultaneously, from three days to twelve months. When the same directional view appears across multiple horizons, conviction is highest and position sizing reflects that certainty.
The algorithm has no emotional response to drawdowns, news cycles, or short term volatility. It does not panic sell, does not chase momentum, and does not anchor to prior positions. Every rebalance is a fresh, data driven decision grounded in current signal output.
Rather than hedging, the strategy takes a full long or full short position at each rebalance. This eliminates the hedging costs that erode returns in traditional long/short equity funds and produces clear, measurable directional bets that scale without structural drag.
The Long View: Six Years of Consistent Outperformance
Since January 2020, the I Know First Combined Long/Short strategy has compounded at 40.48% per year, compared to 14.19% per year for the S&P 500. Over that period, the strategy has navigated a global pandemic, a historic rate hiking cycle, multiple geopolitical shocks, and two consecutive years of tariff-driven market disruption, producing a Sharpe ratio of 1.82 against a maximum drawdown of just -17.2%. Major multi strategy hedge funds have averaged mid single digit annual returns over the same period, underscoring the systematic advantage of AI driven directional investing at scale.
