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Three-fifths of hedge funds declined in the market storms of March as President Trump’s tariff agenda gathered speed. But there were also notable gains within quant equity and macro, according to PivotalPath.
Multi-strategy firms ended the month with an average loss of 0.8%, having faced their greatest test of the decade so far during the biggest deleveraging event since the early days of Covid. That leaves them +0.5% for Q1.
Their performance has attracted intense focus and debate about over-crowding and high leverage in the sector. PivotalPath interpreted it as “a print below the space’s own high standards, but significantly better than major markets as the sector’s risk management clicked into gear.”
Across the hedge fund space, the PivotalPath Composite Index was down 1.0%, but up 0.2% for Q1.
Equity sector funds averaged a 4.3% decline in March, according to PivotalPath, with US long/short short the most affected region. The TMT sector index was the biggest loser, down 5.4% as growth names were sold hard during the de-grossing.
Pain was shared. “Directional and sector specialist funds were hit particularly hard, although low net and variable net players also sustained losses.”
Quant equity “continued to demonstrate a clean pair of heels,” and was the top performer up 1.5% in March and 4.3% for Q1, said the research firm. The strategy “showed how their fast-paced adaptability can make the most of volatile markets.”
Global macro also did well in March, up 1.2% and now 3.7% for Q1.
On a 12-month rolling basis, equity quant is now the sector’s top strategy, with a double-digit alpha print of 10.2% relative to the S&P 500, followed by credit and multi-strategy, which fared less well in March but still delivered 8.6% and 6.3% relative to the index in the 12 months to March.
Equity sector specialists, however, showed negative alpha of 8.7% over
the last 12 months.