In April 2025, the NHX CTA Index was down amid a major market selloff following U.S. President Donald Trump’s announcement of new tariffs, followed by an equally significant rebound as markets responded to a partial reversal of the measures. Performance was mixed across managers and sub-strategies.
Last month, Time-Series Momentum (TSMOM), as measured by RPM’s Market Dynamics Index (MDI), dropped from already low to ultra-low levels amid significant intra-month reversals across financial markets. These swings were largely driven by shifts in U.S. trade policy, which created heightened uncertainty. At the beginning of the month, President Trump’s “Liberation Day” announcement to upend the existing international trading order with huge tariffs – and China’s countermeasures – triggered a sharp selloff across global equity markets and this year’s first broad-based market selloff, deepening fears of a global recession, as the VIX soared to levels not seen since the 2020 Global COVID Crisis. The rout extended to commodities, with crude oil and copper moving sharply lower as well.
However, a week later, following a steep and unexpected selloff in US government debt, the administration revised its stance, temporarily suspending a substantial portion of the tariff package, pausing tariffs for all countries except China for 90 days and introducing exemptions for U.S. technology imports. This shift supported a recovery in equities and bonds. However, the U.S. dollar continued to weaken against a basket of peers, while gold reached new record highs as investors rushed to the safety of one of the few havens left in global markets. In the second half of the month, U.S. stocks and the dollar tumbled, while gold reached $3,500 for the first time ever as President Trump publicly pressured Federal Reserve Chair Jay Powell to lower interest rates – raising concerns over the central bank’s independence and prospects for the world’s largest economy. However, towards month-end, equities rallied again – clawing back all of April’s tariff losses – after Donald Trump had reassured markets that he had no plans to fire the chair of the Federal Reserve. In crypto, Bitcoin shrugged off the market turbulence amid hopes that the U.S.’s global tariff policy would spark fresh interest in the technology behind cryptocurrencies.
Sub-Strategies and Constituents in the NHX CTA Index
Most traditional trend-following managers in the Nordic Hedge Index were down in April. Calculo Evolution Fund, Estlander & Partners Alpha Trend Program, Lynx, and SEB Asset Selection ended the month in negative territory, mainly due to losses in currencies and energies. In contrast, Mandatum Managed Futures Fund delivered a positive return.
Performance among non-traditional trend managers was mixed in April. Within shorter-term trading strategies, Arden xFund and Epoque recorded losses, primarily driven by equity and currency positions, while Lynx Constellation ended the month in positive territory. Among macro and multi-strategy managers, Estlander & Partners Freedom and Lynx Systematic Macro posted negative returns, whereas the shorter-term macro trader Volt Diversified Alpha Fund ended the month in positive territory. Bitcoin-focused trend-follower Anna Fund delivered strong performance, while the multi-manager program RPM Evolving CTA Fund ended the month in negative territory, as the underlying managers’ profits in the VIX were not enough to offset losses in energies and stock indices.
Outlook
The heightened uncertainty caused by the U.S. administration’s abrupt shifts in tariff policy has overshadowed otherwise strong economic indicators, including better-than-expected nonfarm payrolls and continued declines in inflation. The unpredictable nature of policy decisions from the White House has made it increasingly difficult to form a clear outlook for the near-term economic and market environment.
