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Trend Followers Stung in Hedge Fund ‘Bloodbath’ as Rout Deepens

  • Braga’s BlueTrend fund down 4.7% this month through Oct. 19
  • Cantab fund down 9.1% through Oct. 19; loss this year is 28%
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Trend Followers Stung in Hedge Fund Downturn as Market Rout Deepens

Hedge funds using computer-driven models to follow big market trends have been whiplashed as volatility has spiked, among the biggest casualties of a stock rout that has accelerated worldwide.

Funds known as commodity trading advisers, or CTAs, have traditionally shielded investors during market selloffs such as the global financial crisis, especially when mathematical models show a clear or pronounced trend. But this time, they’ve been unable to navigate sharp reversals in asset prices, with Leda Braga’s BlueTrend hedge fund, GAM Holding AG’s Cantab unit and Man Group Plc’s AHL unit among those suffering steep losses in October.