Discretionary macro hedge funds are outperforming their systematic counterparts in 2025 as volatile markets, driven in part by US President Donald Trump’s unpredictable policy decisions, have disrupted trend-following strategies, according to a report by Reuters.
The report cites a client note from Société Générale as highlighting that systematic hedge funds – which rely on algorithms to identify and ride market – are down over 11% year-to-date through May. Major players in this space such as Systematica, Transtrend, and Aspect Capital, collectively managing nearly $30bn, have suffered estimated losses of 18.5%, 16.3%, and 15% respectively.
“Trend funds have been whipsawed and haven’t been able to latch on to any consistent trend,” said Gwyn Roberts, Head of Manager Relations at PivotalPath. “Every time they’ve begun to catch a move, the market has reversed.”
In stark contrast, discretionary macro funds – which allow managers to actively shift exposures based on evolving market conditions – have capitalised on the volatility. These funds were up nearly 7% by the end of May, according to PivotalPath.
Among the winners, EDL Capital posted a 24% gain, Rokos Capital Management returned 9.5%, and Brevan Howard’s Alpha Strategies advanced 4.3%, although its flagship fund remains down 2.1%.
The divergence has been fuelled by sharp market swings, including a 20% drop in European stocks following a surge earlier in the year, and disruptive asset moves triggered by Trump’s “Liberation Day” tariffs announced on 2 April. Losses for trend funds were particularly acute in US Treasuries, the Australian dollar, Japanese government bonds, and commodities like coffee.
While the performance gap between trend and macro funds has narrowed slightly since April as markets stabilised, the broader shift toward more agile, discretionary approaches has become evident.
Some diversified hedge fund platforms with both macro and trend components have managed to cushion the impact:
Man Group’s AHL Alpha Programme is down 10.6%, but its multi-strategy fund is up 5.4%.
AQR’s Apex fund has gained 10.6%, while its alternative trend strategy, Helix, has returned 7% year-to-date.
Graham Capital Management, meanwhile, saw its Multi-Alpha Opportunity fund gain 9%, helping offset an 8.7% decline in its Tactical Trend fund.
