PivotalPath has released their monthly report, the Pivotal Point Of View, which gives a full roundup of hedge fund performance last month. This was a longer one than usual, as we examined the impact of tariffs on returns, how managers positioned themselves, and which strategies did best in this environment.
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Pivotal Point In Time:
A tariff U-turn sparked life back into the markets at month end, but many strategies still struggled to get on top of April’s wild swings.
- April’s close marked 100 days of a new US administration. And a period most visibly embodied by 14 distinct tariffs, applied to 180 countries, and with potentially 1000s of consequences.
- The see-sawing of trade policy made the month one of stark contrasts. At April’s beginning, ‘Liberation Day’ created a renewed wave of volatility that enhanced March’s pain as managers continued to peg back net and gross levels…
- …While at month end a series of policy U-turns on the steepest tariffs, a decent labor market, and largely solid fundamentals reignited a degree of market confidence.
- Over the month the performance of the PivotalPath Composite Index stayed flat at 0.1% and 0.1% for the year, as the wider community of funds felt some pain but handled the volatility well.
- Overall fund performance continued to best major indices YTD, with the Nasdaq (9.65%), Russell 2000 (11.93%), S&P 500 (4.92%), Dow Jones Industrial Average (4.41%) and MSCI World (0.89%), all depressed across 2025.
- Volatility funds were last month’s strongest performers – the PivotalPath Volatility Trading Index was up 4.5% across the month and 6.6% for the year, as a whipsawing VIX and spikes in real and implied volatility drove performance.
- As Vol managers took advantage of uncertainty, managed futures funds continued to be hurt by the unpredictable moves in bonds, equities and the USD. The PivotalPath Managed Futures Index was down 4.6% for the month, taking it to 8.2% YTD.
- One of the early winners of 2025 was also holed by April’s unpredictable swings. The PivotalPath Global Macro Index fell by 1.1%, taking its YTD to 1.9%. Over April the global macro cohort saw significant dispersion, with the month’s strugglers generally hit by an erratic USD in April, as well as losses in fixed-income and global currency trades.
- April’s late month equity recovery – where most markets made back a majority of the early month losses – helped stock pickers recover some of March’s steep drawdown. The PivotalPath Equity Diversified Index finished a complicated April up 1.5%.
2025 Hedge Fund Performance
Strategy Highlights:
Equity Quant strategies continued to thrive among the dispersion.
- Equity Quant, largely market neutral and with little factor exposure, continued to use dispersion in the global equity markets to hunt for alpha. The PivotalPath Equity Quant Index finished April up 0.6%, making for a YTD of 4.3%.
- Multi-Strat managers also continued to manage risk and push for incremental gains across the month’s volatility. The PivotalPath Multi-Strategy Index insulated allocators against the downside finishing April at 0.3%, up 0.9% YTD.
- Fundamental equity players who have struggled to play the macro shocks of fast-paced and unrelenting trade policy shifts, got some of their mojo back as equity market pressures relaxed at the back end of the month.
- The PivotalPath Equity Sector Index was up 1.5% for April, a headline print that masked the ongoing dispersion we see across sector and global specialists.
- While the PivotalPath Equity Diversified: US Long/Short Index finished April at 0.0%, Europe and Global equivalents were up a respective 1.3% and 1.7%.
The 'boring stability' of European banks now welcomed by managers
In the face of 2025’s volatility, European banks have reported stronger-than-expected first-quarter profits.
UBS saw revenues in its global markets unit rise by 32%, posting $1.7 billion in net profits. Similarly, the UK’s Barclays experienced a 19% jump in pre-tax profit, revising its 2025 income forecast upward after solid performance by its trading operations. Deutsche Bank posted a 39% rise in pre-tax profit to €2.8 billion.
Managers say the old world thinking of the ‘Maastricht Treaty EU’ is being gradually supplanted by an adoption of the Draghi Reforms, that will focus on strengthening fiscal integration, completing the banking and capital markets union, and improving EU governance to enhance resilience, competitiveness, and unity across member states. All changes that are deemed positive for the region’s banks.
European banks were in the past infamous for being problematic – now, after 15 years of conservative regulation, recapitalization, near risk-free balance sheets and, at last, meaningful margin expansion they are seen as good bets and positioned for an elongated cycle of growth.
Managers sense an extended opportunity for gains. “We like the space, its earnings and capital returns are growing, with EPS also growing,” said a US fund.
Read the full report here by PivotalPath
