Macro Funds Face Losses Amidst Iran Conflict, Bridgewater Stands Out
Macro hedge funds, for the most part, have struggled to navigate the market turmoil triggered by the strikes on Iran by the US and Israel. Several prominent funds experienced losses in March, while Bridgewater Associates, founded by Ray Dalio, managed to avoid significant pain.
Performance of Key Macro Funds
Brevan Howard’s Master fund, its longest-running strategy, reversed its 2026 gains, falling 6% through last Friday. Caxton Associates, managed by Andrew Law, is down 15% for the month as of the same date. Taula Capital, backed by Millennium Management, has lost over 7% during the same period. Bloomberg first reported Brevan and Taula’s losses, while the Financial Times first reported Caxton’s losses.
The funds either declined to comment or did not respond to requests for comment.
Bridgewater Associates Defies Trend
In contrast to the broader trend, Bridgewater Associates’ flagship Pure Alpha strategy is down less than 1% in March through last Friday. This performance comes after a strong 2025, where the fund saw a 33% surge. Bridgewater did not respond to requests for comment.
Geopolitical Factors and Interest Rate Expectations
Macro investors utilize forecasts on geopolitical outcomes to inform their bets across asset classes, including currencies, bonds, and interest rates. A reversal in short-term interest rate expectations in the UK and Europe appears to have negatively impacted several funds.
The expectation at the start of the year was for interest rate cuts by the Bank of England and the European Central Bank. While, concerns about inflation, fueled by rising energy costs stemming from the Iran conflict, have prompted central bankers to reconsider this path. Andrew Law of Caxton Associates had predicted falling UK borrowing costs in 2026, according to the Financial Times.
Wider Market Impact
The fallout from the strikes on Iran has extended beyond macro investors. Global stocks have fallen, and HSBC’s Hedge Weekly report indicates that Renaissance Technologies, Maverick Capital (a Tiger Cub fund), and Marshall Wace’s Alpha Plus multistrategy offering have all experienced losses this month. These firms similarly declined to comment.
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