If 2024 was the year of “AI will replace everything,” 2025 is the year we’re remembering why humans still run the show, especially in finance.
Right now, hedge fund land is split between two species: the rigid, algorithm‑worshipping trend followers, and the nimble, gut‑driven macro traders. But guess which one is getting pummeled?
Systematic Trend Funds Are Bleeding, Hard
By the end of May, systematic trend funds were down a brutal 11%, according to SocGen. The big names like Systematica (-18.5%), Transtrend (-16.3%), and Aspect Capital (-15%) are underperforming and losing investor trust at light speed.
Why? Because their algorithms are built to ride momentum, not survive chaos. And 2025 has been nothing but chaos, thanks to U.S. President Trump’s erratic policies, unpredictable tariffs (hello, April 2 “Liberation Day” shock), and extreme market whiplash.
Markets zigged. Algorithms zagged. Portfolios got wrecked.
“Every time trend funds have begun to latch on to a market move this year, it has changed,” said PivotalPath’s Gwyn Roberts. That’s a polite way of saying: the bots keep getting fooled.
Meanwhile, Macro Funds Are Eating Their Lunch
Now contrast that with discretionary macro hedge funds; you know, the ones still run by carbon‑based lifeforms. They’re up nearly 7% through May.
Call these guys the stars of the show.
EDL Capital: +24%, Rokos Capital Management: +9.5%, Brevan Howard Alpha: +4.32%, and Man Group’s multi-strat: +5.4%.
While algos were buying into coffee, U.S. Treasuries, the Aussie dollar, and Japanese bonds (just in time to get smoked), human‑driven macro desks were adjusting in real time, spotting the political landmines and dodging them like pros.
Algorithms Aren’t Built for 2025
Systematic funds require stable, directional trends. But we’re in a world where tariffs get dropped via tweet, interest rate expectations flip in 48 hours, and entire asset classes reverse overnight.
It is not 2015 anymore. Markets aren’t “efficient.” They’re emotional, political, and increasingly reactionary. And no amount of backtesting can prepare a bot for the psychological chaos of an election year featuring Trump 2.0 and a highly fragmented global economy.
In other words: if your investment strategy depends on calm, you’re screwed.
AQR & Man Group, the Smart Diversifiers
Not all systematic funds are failing. AQR’s multi-strategy Apex fund posted a +10.6% return through May, and its trend fund Helix even beat the odds with a 7% gain, though it flatlined last month. The secret? Diversification and hybrid strategies.
Same with Man Group: AHL Alpha (their trend fund) may be down 10.6%, but their multi-strategy vehicle is holding up nicely. They’re proving that a blend of human and machine, not pure code, offers resilience.
It is Time to Rethink Trend Worship
Systematic trend following has its place. It is a solid defensive allocation in normal times. But if you’re still betting big on it in volatile, geopolitically explosive markets, you’re not investing. You’re gambling on outdated assumptions.
What this moment shows is simple: judgment matters again. Macro traders are guessing and thinking better. They’re seeing nuance, understanding politics, and embracing volatility, not running from it.
So here’s a hot take that shouldn’t be hot at all: Stop over-indexing on algorithms. Start investing in judgment.
