Hedge fund performance in 2025 reveals a stark divergence between strategy types, as volatile markets reward nimble macro managers while punishing rigid trend-following models. Systematic hedge funds—reliant on algorithms that track market momentum—have suffered sharp losses, with strategies run by firms like Systematica, Transtrend, and Aspect Capital falling between 15% and 18.5% by end-May, according to data from Societe Generale and industry sources.

These losses highlight the limitations of trend-following in a year marked by unpredictable geopolitical developments, including abrupt policy shifts by U.S. President Donald Trump. PivotalPath’s Gwyn Roberts noted that trend funds have repeatedly failed to hold positions long enough to benefit, as markets have reversed direction rapidly throughout the year.

In contrast, discretionary macro hedge funds, which allow managers to shift strategies and asset classes as conditions change, have posted stronger results. EDL Capital is up 24%, Rokos Capital Management 9.5%, and Brevan Howard’s Alpha Strategies 4.32%. Discretionary macro traders have averaged higher long-term returns than managed futures funds, reflecting their ability to adapt in real time. Still, large multi-strategy funds with exposure to both styles have found balance. AQR’s Apex fund is up 10.6%, and Graham Capital’s gains in one fund have offset losses in another, highlighting the benefit of diversification in turbulent markets.

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Source: https://finance.yahoo.com/news/analysis-trend-hedge-funds-struggle-050317695.html