Hedge funds suffered their steepest monthly losses since the 2020 pandemic, with the HFR flagship index plunging 3.1% in March—a sharper decline than the 9.1% drop during COVID lockdowns. The turmoil stemmed from escalating tensions between the U.S., Israel, and Iran, exacerbated by President Trump’s volatile rhetoric and oil market shocks. Brent crude oil prices surged above $110 a barrel after Iran closed the Strait of Hormuz, only to crash below $95 after Trump’s abrupt 14-day ceasefire announcement, triggering chaotic swings in equities and bonds. Macro-focused funds, which bet on economic trends, bore the brunt: Caxton’s London-based macro fund fell 15%, while Citadel’s fixed-income portfolio dropped 8.2%, and Brevan Howard’s master fund lost 6.6%.

Analysts noted that even gold, a traditional safe haven, failed to cushion losses as markets recalibrated inflation expectations. HFR president Kenneth Heinz highlighted that funds lost more on bond positions than they gained from oil bets, calling the volatility “brutal.”.