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Bailey McCann, Opalesque New York:

2025 was supposed to be a boom year for asset managers, but it may end up being anything but. The latest hedge fund outlook from Man Group suggests that economic uncertainty could make it challenging to trade anything but volatility strategies.

According to Man Group, economic data points to a potentially weaker consumer, stickier inflation, and renewed recession fears all of which are making analysts cautious about investment returns for 2025.

At a strategy level, Man Group has downgraded its view of structured credit and market-neutral equity long/short from positive to neutral. The firm downgrades strategies to neutral where it believes the opportunity for above-average returns is now lower, or where it believes the risk of losses due to unstable markets has increased.

"In structured credit, the reduction reflects the recognition that spreads have tightened further across most market segments compared to recent quarters, while US consumer confidence data has rapidly weakened during Q1. In market-neutral equity long/short, we acknowledge that, despite strong returns over the past few years, heightened geopolitical uncertainties could lead to more frequent episodes of deleveraging for the remainder of the year," analysts write.

Man is positive on two strategies - global macro and micro quantitative strategies. Analysts expect that global macro funds will be able to position themselves well to take advantage of ......................

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