Man Group examines the performance of trend-following strategies during periods of market stress, emphasizing the importance of patience. While such strategies may initially underperform during market dislocations, historical patterns indicate that they often recover and deliver significant gains over time. The report underscores that trend-following requires time to adjust positions and capitalize on emerging trends, highlighting the concept of “crisis alpha” where these strategies can outperform during prolonged market downturns.
Why Patience Matters During Market Stress
Man Group
Tarek Abou Zeid, Harry Moore, Yash Panjabi
Research
6 Pages
Key Takeaways
Trend-following requires patience: Historical crises show that trend strategies often dip before delivering strong returns.
Adjustment periods are normal: Trend strategies need time to reposition and capture new market trends during dislocations.
Crisis alpha emerges over time: Staying invested in trend strategies can lead to significant gains during extended market downturns.
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