Blue Diamond Asset Management, the Swiss hedge fund known for its volatility-focused strategies, suffered its worst-ever monthly loss in April amid a sharp reversal in global risk sentiment triggered by tariff turmoil, according to a report by Bloomberg.
The report cites investor documents seen by Bloomberg as revealing that the Zug-based manager, which oversees approximately $2.2bn, declined 11% last month after initially plunging as much as 17% early in April. While the fund staged a partial recovery as markets stabilised, the drawdown marked a new low for Blue Diamond, surpassing its previous monthly record loss of 7.7% in October 2013.
The dislocation followed an early-April announcement by US President Donald Trump of unexpectedly aggressive tariff measures, which rattled markets and sent implied volatility soaring. Although the administration later eased its stance and resumed trade negotiations with key partners, the initial spike proved painful for funds making directional or relative-value bets on volatility.
Blue Diamond, led by founder and CIO Jonas Stark, specialises in complex volatility strategies across global asset classes. The firm has built a reputation for its sophisticated risk models and relative-value framework, often trading instruments linked to the VIX and other volatility indices.
While the VIX Index surged to a five-year high on 8 April before retreating, the whipsaw in volatility levels created a punishing environment for strategies seeking to arbitrage short-term dislocations.
Stark declined to comment on the fund’s April performance.
April’s drawdown brought Blue Diamond’s year-to-date losses to 12%, positioning 2025 as potentially its second-ever negative calendar year since inception. The only other down year came in 2017, when the fund lost 8% amid a prolonged period of volatility suppression.
Despite the setback, peer performance has remained positive. The HFRI Relative-Value Volatility Index, which tracks funds employing similar strategies, rose 1% in April and is up 2.7% year-to-date, suggesting Blue Diamond’s losses stem from idiosyncratic positioning rather than a broader strategy failure.
