Pivotal Point of View – June 2025

The majority of strategies enjoyed a healthy May as equity markets roared back to life and macro trends continued to provide opportunities.

• May was a month where common sense (supported by largely solid market fundamentals), reasserted itself over the recent months’ saber rattling of tweets and tangled trade policy.
• Equity markets responded positively to the ‘calm’ with the MSCI World hitting 5.92% and the S&P 500’s 6.29% making for its best May in three decades, as tariffs receded and stalwarts like Nvidia produced a run of more than solid results.
• While markets recovered across the month, YTD the performance of a majority of hedge fund strategies continue to best major indices, with the PivotalPath Composite Index’s 2.1% for the year ahead of the Nasdaq (1.02%), Russell 2000 (7.35%), S&P 500 (1.06%), and Dow Jones Industrial Average (0.64%).
  • After a period of uncertainty, equity managers roared back to life in May – with the PivotalPath Equity Diversified Index up 4.4% across the month, making 4.9% for the year.
  • Hedge funds took the opportunity to shake off some of their early-year bearish sentiments, becoming net buyers of a range of equities across regions and sectors, while also increasing leverage.
  • Gross trading activity also saw a significant jump – the most significant moves in 2 months, with long buys outpacing short sales at the fastest rate since the ‘golden days’ of late 2024.
  • Most managers still remain cautious around tariffs and consumer sensitive areas of retail and industrials, while very few funds chose to cover short positions as the sector, taking stock of a topsy-turvy year, still believes 2025 to be capable of delivering the unexpected.