Lynx Asset Management is best known for its flagship trend-following strategy, the Lynx Program, which celebrated its 25th anniversary this year. In late 2019, the Stockholm-based systematic manager introduced the Lynx Constellation Program, a pure machine learning-based complement to the Lynx Program. While it retains many of the trend-following characteristics that investors value, it also delivers a return profile that can diverge meaningfully from traditional trend strategies, particularly during periods that have challenged trend-followers – such as in 2024 and early 2025, with April standing out as a notable example.
Lynx Constellation gained 3.2 percent in April, a month in which most traditional trend-followers – including the Lynx Program – struggled amid sharp market reversals. “In many cases, Lynx Constellation was positioned differently from our trend-following models, suggesting that the program had identified unique patterns in market behavior,” explains Andreas Bernsel, Portfolio Manager and Senior Research Partner at Lynx Asset Management. “The program is shorter-term than most trend-following strategies, adapting to the market environment relatively quickly, which also aided performance during the month.” Notably, Constellation maintained short positions in crude oil entering the month despite the strong price appreciation in March, resulting in a solid positive contribution, particularly early in the period.
“In many cases, Lynx Constellation was positioned differently from our trend-following models, suggesting that the program had identified unique patterns in market behavior.”
The trend-following environment in 2024 was also notably challenging, characterized by a lack of strong, sustained directional moves across major asset classes. Macro uncertainty – such as mixed inflation data and shifting central bank policies – further contributed to frequent and unexpected market reversals. While these conditions proved difficult for most trend-following managers, Lynx Constellation fared relatively well with a return of 9.9 percent. “Like most trend-following strategies, the investment objective of Lynx Constellation is to generate attractive risk-adjusted returns with low correlation to traditional asset classes,” notes Bernsel.
Discussing the similarities and differences between Lynx Constellation and the Lynx Program, Bernsel explains, “Many of the machine learning models employed in Lynx Constellation have been trained on filtered data like that used by our trend models, which contributes to a positive correlation to trend-following.” However, unlike the Lynx Program, “Lynx Constellation does not target positive performance during challenging equity market environments as a concrete secondary objective.” This distinction contributed to Constellation’s modest underperformance relative to the Lynx Program in 2022 but also enabled stronger outperformance in the years that followed, as equity markets rebounded. “Importantly, most models traded in Lynx Constellation are also included in the Lynx Program,” Bernsel notes.
Many of the models within Lynx Constellation are expected to exhibit a positive correlation to trend-following, a relationship reflected in the program’s strong performance in 2022. Explaining why Constellation can perform well even in more challenging environments for trend-followers, Bernsel notes, “Constellation’s ability to capitalize on both linear and nonlinear relationships between markets, often identifying opportunities missed by less sophisticated trend-following approaches, has enabled it to perform relatively well in less favorable environments for trend.”
“Constellation’s ability to capitalize on both linear and nonlinear relationships between markets, often identifying opportunities missed by less sophisticated trend-following approaches, has enabled it to perform relatively well in less favorable environments for trend.”
While Lynx Constellation has delivered three strong years of performance – including a solid showing in 2025 – its early track record was more mixed. “Notably, Lynx Constellation faced challenges early in the pandemic and again in 2021, as markets behaved like they never had in the past,” recalls Bernsel. “Following a comprehensive research review, we revised the program’s portfolio construction approach in early February 2022, and performance has been strong ever since.” Indeed, Lynx Constellation generated an annualized return of 12.9 percent over the three years ending in 2024, with a Sharpe ratio of 1.3. Reflecting its strong performance, the fund was awarded second-best Nordic trend-following fund at this year’s Nordic Hedge Award.
