By Nell Mackenzie and Carolina Mandl

LONDON (Reuters) -Turbulent March markets stalled positive returns for some of the biggest global hedge funds while systematic and some smaller, more nimble funds ended the first quarter with positive returns, according to sources familiar with the matter.

As investors adjusted to seismic shifts in German policies and growing U.S. tariff uncertainty, German 10-year bonds suffered their largest weekly selloff since 1990, the euro recorded its largest monthly gain since 2022, and the S&P 500 saw its biggest weekly fall in six months.

Hedge funds cut their equity exposure in early March. The biggest funds faced margin calls, requiring traders to stump up more cash in risky markets, said a UBS note to clients dated March 27.

Portfolio losses stemmed from stocks that were sensitive to the overall rise and fall of markets, including the biggest U.S. tech names, the note said.

“…multi-strat funds acted quickly to raise cash, mitigate losses, and preserve profitable trades in other areas such as swap spreads and macro exposures,” added the note.

Among the biggest global multi-strategy funds, Citadel and Millennium Management returned -0.8% and -2% for the quarter, respectively, said sources. Balyasny Asset Management finished the quarter up 2.5%, said a separate source.

These three funds’ results were first published by Bloomberg on April 1.

Hedge funds with a more systematic approach fared better, especially those with funds that trade managed futures and niche markets.

Billionaire investor Cliff Asness’s AQR Capital Management finished the first quarter with positive returns in several of its funds, said a source familiar with the matter on Tuesday.

The $128 billion hedge fund returned a positive 3.4% performance in March. Its multi-strategy fund, Apex Strategy, finished with a 9% first-quarter return.

This strategy benefited from a balanced long and short strategy. It also saw arbitrage gains, exploiting the difference of one financial asset against another, said the source.

A long position expects an asset to rise, whereas a short position makes money when it declines in value.

AQR’s Managed Futures Full Strategy posted an 8.2% return for the quarter. This fund was buoyed by stocks trades but also benefited from successful fixed-income and commodities trades.

Hedge fund EDL Capital, which trades assets like currencies and bonds based on global macroeconomic outlooks, has returned 22% so far in 2025, a source familiar with the situation said on Wednesday.

The $1.5 billion fund, run by star trader Edouard de Langlade, finished March up 14% after a February in which the fund returned 5.9%, said the source.

Bridgewater Associates’ flagship fund Pure Alpha 18% volatility posted a 9.9% gain in the first quarter, Reuters reported.

Hedge funds picking long and short stock positions posted a negative 2.4% return in March, whereas systematic stock traders gained over 4%, Goldman Sachs said in a note to clients on Wednesday.

Fund March Q1 2025

AQR Apex Strategy 3.4% 9%

AQR Delphi Long-Short Equity Strategy 2.3% 9.7%

AQR Helix Strategy 4.4% 3%

AQR Managed Futures Full Strategy 2.5% 8.2%

EDL Capital 14% 22%

Citadel Wellington -0.5% -0.8%

Millennium Management -1.2% -2%

Balyasny -1.00% 2.5%

Bridgewater Pure Alpha 18% volatility 9.9%

(Reporting by Nell Mackenzie in London and Carolina Mandl in New York. Editing by Amanda Cooper, Dhara Ranasinghe and Mark Potter)