While stock markets have surged this year in an historic rally, Man Group’s AHL Trend Alternative Fund, a prominent trend-following strategy at the world’s largest publicly listed hedge fund, is seeing some of the worst returns in it's history, according to a report by MarketWatch.
The report cites data from Kepler as revealing that the fund, which manages over $783m, posted a -7.26% loss in October and is down 12.77% year-to-date, making its poorest performance in the first ten months of a year in over a decade. By comparison, the S&P 500 has gained 24.9% over the same period.
The fund’s struggles are largely attributed to volatile and rapidly reversing market trends, particularly in bond markets. In October, sharp turnarounds in US and European bond yields resulted in significant losses. Trend-following strategies like AHL Trend Alternative are typically heavily exposed to bonds, amplifying their vulnerability to abrupt shifts.
Man Group’s AHL Trend Alternative Fund, launched in 2009, is one of the smaller offerings within the hedge fund’s AHL division, which dates back to 1987. Despite achieving total gains of 33.66% since inception, the fund has significantly lagged the S&P 500, which has returned over 530% during the same period.
In the past decade, the fund posted gains of 22.11%, but recent years have been less favourable with five-year performance standing at -5.02%, three-year performance at -12.68%, and 12-month performance at -17.96%.
In 2023, the fund recorded a -3.39% loss, following a 12.4% gain in 2022.
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