Key Takeaways
- • CTA and managed futures funds were down 9.6% through June 2025, on track for their worst annual performance since at least 1998, according to PivotalPath data cited by The Wall Street Journal.
- • The underperformance compares with a 4% return for hedge funds overall and a 6.2% gain for the S&P 500 including dividends over the same period.
- • Man Group's flagship AHL Alpha fell 7.8% and its AHL Evolution fund shed more than 10%, while Systematica's BlueTrend was reportedly down 16.7% and Aspect Capital's flagship lost 14.5%.
- • Sharp reversals, policy shocks and low-conviction markets, particularly in bond yields and commodities, have left trend-following models exposed to sudden turns rather than sustained moves.
- • Man Group has pulled 150 quant staff back into the office full-time for a confidential internal review aimed at adapting models and execution.
Summary
Quantitative hedge funds specialising in trend-following strategies are facing one of their most difficult years in decades, according to a report by The Wall Street Journal. Data from PivotalPath show that CTAs, or managed futures funds, were down 9.6% through June, placing the sector on course for its worst annual performance since at least 1998. Over the same period, hedge funds overall returned 4%, while the S&P 500 gained 6.2% including dividends.
The weakness is broad across the CTA sector, which manages more than $300bn. Man Group, the world's largest listed hedge fund firm and a pioneer in systematic trading, saw its flagship AHL Alpha strategy decline 7.8%, while the more specialised AHL Evolution fund lost over 10%. Systematica's BlueTrend is reportedly down 16.7%, and Aspect Capital's flagship fund has lost 14.5%.
The strategy, which earned praise for uncorrelated returns and strong performance during crises such as 2008, when it returned roughly 27%, and 2022, is struggling in current conditions. Sharp reversals and low-conviction price action have become frequent, and inconsistent signals, particularly in bond yields and commodity prices, have left funds exposed to sudden turns instead of sustained directional moves. Policy shocks have compounded the difficulty.
In response, Man initiated an intensive internal review this spring, calling 150 quant staff back into the office full-time for a confidential "all hands" project aimed at adapting models and execution.
The underperformance contrasts with strength in other hedge fund strategies. According to PivotalPath, discretionary macro and long-short equity strategies are up 10.5% and 9.2% year-to-date, respectively.
The weakness is broad across the CTA sector, which manages more than $300bn. Man Group, the world's largest listed hedge fund firm and a pioneer in systematic trading, saw its flagship AHL Alpha strategy decline 7.8%, while the more specialised AHL Evolution fund lost over 10%. Systematica's BlueTrend is reportedly down 16.7%, and Aspect Capital's flagship fund has lost 14.5%.
The strategy, which earned praise for uncorrelated returns and strong performance during crises such as 2008, when it returned roughly 27%, and 2022, is struggling in current conditions. Sharp reversals and low-conviction price action have become frequent, and inconsistent signals, particularly in bond yields and commodity prices, have left funds exposed to sudden turns instead of sustained directional moves. Policy shocks have compounded the difficulty.
In response, Man initiated an intensive internal review this spring, calling 150 quant staff back into the office full-time for a confidential "all hands" project aimed at adapting models and execution.
The underperformance contrasts with strength in other hedge fund strategies. According to PivotalPath, discretionary macro and long-short equity strategies are up 10.5% and 9.2% year-to-date, respectively.
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