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Hedge Funds Regain Momentum As Macro And Quant Shine Amid Trade Calm

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HFA Staff
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PivotalPath has released their monthly report, the Pivotal Point Of View, this research is compiled based on data from more than 2,600 institutionally-relevant funds, and conducted on behalf more over $3B in client capital.

Pivotal Point In Time

The majority of strategies enjoyed a healthy May as equity markets roared back to life and macro trends continued to provide opportunities.

  • May was a month where common sense (supported by largely solid market fundamentals), reasserted itself over the recent months’ saber rattling of tweets and tangled trade policy.
  • Equity markets responded positively to the ‘calm’ with the MSCI World hitting 5.92% and the S&P 500’s 6.29% making for its best May in three decades, as tariffs receded and stalwarts like Nvidia produced a run of more than solid results.
  • While markets recovered across the month, YTD the performance of a majority of hedge fund strategies continue to best major indices, with the PivotalPath Composite Index’s 2.1% for the year ahead of the Nasdaq (1.02%), Russell 2000 (7.35%), S&P 500 (1.06%), and Dow Jones Industrial Average (0.64%).
    • After a period of uncertainty, equity managers roared back to life in May – with the PivotalPath Equity Diversified Index up 4.4% across the month, making 4.9% for the year.
    • Hedge funds took the opportunity to shake off some of their early-year bearish sentiments, becoming net buyers of a range of equities across regions and sectors, while also increasing leverage.
    • Gross trading activity also saw a significant jump – the most significant moves in 2 months, with long buys outpacing short sales at the fastest rate since the ‘golden days’ of late 2024.
    • Most managers still remain cautious around tariffs and consumer sensitive areas of retail and industrials, while very few funds chose to cover short positions as the sector, taking stock of a topsy-turvy year, still believes 2025 to be capable of delivering the unexpected.
  • While discretionary equity managers latched onto some of the returning confidence, after a period in the doldrums, equity quant continued to demonstrate the steady out-performance that has marked it as one of the most successful and consistent strategies of 2025.
    • The PivotalPath Equity Quant Index is up 6.8% YTD, as funds in this cohort nimbly rotate into outperforming sectors early, benefiting in May from the rebound in old economy stocks and renewed strength in large-cap tech.

2025 Hedge Fund Performance

Strategy Highlights: Discretionary macro managers make the most of 2025’s ongoing disconnects in the global economy.

  • While the main PivotalPath Global Macro Index delivered muted returns across May of 0.4%, contributing to a steady print of 3.1% YTD, the distinct cohorts that make up this peer group have seen a huge amount of dispersion across the year, with discretionary macro managers surging ahead versus both quant macro funds and commodities specialists.
    • The PivotalPath Global Macro: Discretionary Index is now up 7.1% YTD, pulling away from both the PivotalPath Global Macro: Quantitative Index’s 0.0% for the year and the PivotalPath Global Macro: Commodities Index’s 1.8%.
    • Across April and May discretionary macro managers with a heavy allocation to equities clicked into gear, as did portfolios with positive exposure to the Euro and Yen.
  • And while parts of the macro space navigated 2025’s overlapping upheavals well, the managed futures cohort continued to labor across the month, with the PivotalPath Managed Futures Index down 1.5% in May and 10.00% YTD.
    • Yet the pain may finally be easing with a number of managed futures specialists latching onto clearer trends – like rising commodities – at the end of the month. relaxed at the back end of the month.

2025 Hedge Fund Performance

Read the full report here by PivotalPath

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.