Quantitative funds positioned against fixed-income securities this year, buoyed by inflation concerns stemming from geopolitical tensions and strong US economic data.

Some investors unwound losing positions as yields rose, amplifying market moves and volatility.

Hedge funds using computer-driven models profited as government bond prices fell and yields rose to multi-decade highs in the US and Europe.

Central banks raised rates to fight inflation, with the Fed lifting rates for the first time since 2023, the ECB hiking twice, and traders eyeing a potential BoE move.

Graham Capital’s Tactical Trend fund advanced more than 31% year-to-date, including a 3.3% gain in September.

Resilient US data reinforced expectations of higher rates, while hefty debt sales pushed long-term yields higher as investors demanded more compensation for risk.

US and European bond yields climbed from roughly 4% in February to over 5.2%, underscoring the inverse relationship between yields and prices.

Energy markets contributed to gains for Winton and Aspect as the Iran conflict kept crude prices elevated, with oil around $102 a barrel after recent gains.

Aspect Capital’s flagship fund rose about 21% this year and roughly 5% in the last month, with other quant funds like Winton posting substantial gains aided by energy bets as oil stayed elevated due to the Iran crisis.