Quantitative hedge funds posted standout returns in the first half of 2025, thriving amid volatile markets and policy shocks that punished traditional strategies but created fertile ground for systematic stock-pickers, according to a report by Bloomberg.
Marshall Wace’s TOPS, AQR’s Delphi Long-Short Equity, and Renaissance Institutional Equities Fund each gained around 11%, while machine-learning fund Voleon Composite surged 12.8%. Two Sigma’s Spectrum and BlackRock’s equity market neutral fund returned 7.6% and 7.7% respectively, as quants capitalised on a sharp return to fundamentals and widening stock dispersion.
The revival in “basic rational investing,” as AQR’s Cliff Asness described it, helped these strategies profit from relative-value trades in a market where stocks moved independently once again – a contrast to the megacap-dominated rally of recent years. Momentum, a core quant factor, posted a seventh straight quarterly gain, further boosting performance.
However, not all systematic strategies fared well. Trend-following funds that rely on persistent momentum across futures markets were hit hard. Systematica’s Bluetrend and Transtrend both fell over 17%, while Man AHL Alpha dropped 7.6%, marking the worst half-year for the sector since 2000, according to Societe Generale.
With dispersion elevated and macro shocks continuing to rattle markets, systematic equity funds appear well-positioned heading into the second half — though even algorithms may require human oversight to navigate unpredictable policy shifts.
