April was a strange month. We saw dramatic moves after the US Liberation Day, which wreaked havoc in the Equity, Bond, and Currency markets. The S&P dropped 10% in a dramatic unwind of global stability, only to show a large positive day a few days later. Several of the most destabilizing policies were later walked back, delayed, or clarified as bond yields started to increase, showing increasing uncertainty. In the end, the most significant Trade Policy is the remaining Chinese tariffs where others have been modified or delayed.
At the end of the month, April showed a modest decline across most equity markets, but with dramatic intra-month volatility. Not acting provided the right decision, despite the increased uncertainty that prevailed throughout April.
Webinar Invitation: Join our Webinar / Navigating the Storm / An ODD Seminar on the 6th of May: https://streamyard.com/watch/FUSZjHbwXDyu
For a full list of panelist see our earlier post: https://nilssonhedge.com/2025/04/30/navigating-the-storm-odd-seminar/
Looking across strategies in April, it seems like CTA, and especially Trend Followers, reduced equity market risk dramatically in the first few days of the correction. As the correction was ‘V’-shaped, with hindsight, this was the wrong decision. Slower strategies might have done a bit better as the frequency did not disturb the strategies.
For April, based on our Daily Indices, we note that CTA diverged from the rest of the strategies that mostly kept their positions. Crypto was the exception, with some of the meme coins having dramatic positive performance.
Acknowledging reporting biases and that we are only a few days into the month, the above results are mirrored by the daily indices, although with different magnitudes (strong results likely to be reported early). CTA at the bottom, and Crypto strategies at the top.
For CTA engaging in short volatility strategies, we saw generally negative performance with dramatic VIX spikes. We have noted that a few of the larger managers stopped reporting or shut down funds during April. Trend strategies will have a negative skew, with the results expected to decline as we get more managers.
Looking at the few Managed Futures managers that have reported, we see some long volatility, tail hedge strategies, but also some of the Discretionary Macro strategies at the top of the performance rankings.
For CTA the dispersion was likely very high. And the bottom quartile manager recorded a loss that was on par with other dramatic months in the Managed Futures history. Jan 18 is still the worst over the last seven years. At least, positions are cleared out and managed are well adapted to catch on new trends as Trade Policy is further clarified.