Can Advisors Boost Portfolio Resilience with Global Macro Strategies in 2025?

By Rick Lake | Founder, Narrative Alpha
April 18, 2025

The Market Turn Has Arrived

In early 2025, institutional investors were already positioning for trouble ahead. A Société Générale survey showed that over 40% of institutional investors planned to increase allocations to global macro strategies.[1] Why? Because markets were shifting, traditional diversification wasn’t working, and macro offered potential flexibility when other strategies might falter.

Now, that moment is here.

In response to President Trump’s sweeping tariffs – effectively launching a global trade war – markets sold off sharply. U.S. equities dropped roughly 20% from their February highs, with volatility spiking across the globe. This “Tariff Tantrum” is shaking investor confidence and making it painfully clear: portfolios built on outdated diversification models may not hold up in today’s environment.

Why Advisors Should Care

For years, the 60/40 portfolio served as the foundation of diversification. But in today’s interconnected markets, it no longer offers the protection it once did. Rising interest rates, persistent inflation, and reactive central bank policies have pushed bonds and equities into a tighter correlation.[2] When stocks fall, bonds often do too.

In times like these, advisors need uncorrelated strategies – ones that can navigate volatility rather than succumb to it. Institutional investors were seeking that adaptability before the selloff began. Advisors can still take a page from that playbook.

Key Global Macro Drivers for 2025

Amid ongoing market dislocations, these are the core reasons global macro strategies are gaining traction:

1. Uncorrelated Returns – Global macro strategies have a history of performing well when traditional assets struggle. With bonds losing their hedge appeal, macro may offer a compelling alternative.
2. Geopolitical and Market Volatility – Trade wars, political instability, and policy uncertainty are now central drivers of market behavior. Experienced macro managers embrace this volatility, seeking opportunity in disruption.
3. Interest Rate Divergence – Central banks around the world are not aligned. The Federal Reserve, ECB, and Bank of Japan continue to pursue divergent policies. Macro strategies can capitalize on these mismatches, trading across currencies, commodities, and fixed income.

Global macro strategies are built for moments like this—when the world doesn’t move in sync and risks become opportunities.

Proof in Performance

Macro strategies have shown resilience across turbulent periods. Consider:

• Results in Tough Times – Macro strategies posted gains during the 2000–2002 Tech Bust and the 2007–2009 Financial Crisis.[3]
• Ballast for Traditional Assets – Since 2022, macro hedge funds have often posted positive returns during months when both stocks and bonds declined.[4]
• Beneficiary of Rising Rates – Higher interest rates historically have helped macro funds, which can earn on cash reserves while strategically deploying capital.

According to BlackRock research,[5] global macro strategies have historically demonstrated strength amidst higher rates:

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS

Risks of Global Macro

While macro offers potential benefits, it comes with unique risks:

• Manager Performance Dispersion – Results vary widely across managers. Some thrive in shifting conditions, while others struggle. Manager selection matters.
• Idiosyncratic Outcomes – Macro strategies may rely on individual decision-making rather than models. That human element can bring unpredictability and performance surprises, positive or negative.
• Low Correlation Can Mean Low Returns – In strong equity bull markets, macro strategies may underperform or even post losses. Advisors should consider macro’s role as a complement within a balanced allocation.
• Timing Mismatches – Some macro strategies may lag early but deliver later as portfolios adjust to shifting conditions.

Advisor Takeaway: The Time to Adapt Is Now

Institutional investors refocused on global macro in anticipation of a more volatile environment. That environment is now here. Advisors who consider adding macro exposure may be able to help clients navigate market turbulence, potentially reduce volatility, and seek more resilient outcomes.

Time to Rethink Portfolio Construction

If your clients are still relying on outdated diversification models, now is the time to reassess. Global macro strategies have historically demonstrated the potential to navigate volatile markets and may be worth considering for portfolios in 2025.

Markets have changed. The old playbook isn’t working. But global macro may offer a path forward – potentially providing an adaptive, historically resilient approach for navigating uncertainty.

Rick Lake writes and speaks about alternative investing. Learn more at his website: www.ricklake.com. Thanks to Bill Marr at Welton Investment Partners for his collaboration on this article

Disclaimer:

This content is for informational and educational purposes only and is not investment advice or a recommendation to buy, sell, or hold any security or strategy. The views expressed are the author’s and do not necessarily reflect those of any firm or contributors. Past performance is not indicative of future results. All investments, including alternative and global macro strategies, involve risk and may not suit all investors. Financial professionals must perform their own due diligence and consider each client’s goals, risk tolerance, and financial situation. Information is believed to be reliable at the time of writing but is not guaranteed to be accurate or complete. This content does not constitute legal, tax, or accounting advice.

Footnotes

[1] Nell Mackenzie, Carolina Mandl, and Summer Zhen ,“Macro a must-have for hedge fund investors betting on 2025 market swings”, Reuters, December 18, 2024. David Regan, “SG Prime: Fall 2024 Investor Sentiment Report”, Societe Generale, November 2024.

[2] Maria Nikitanova and Dane Smith, “The Global Trend of Positive Stock/Bond Correlation,” State Street Global Advisors, December 23, 2024. Samuel Zief, “Navigating the new year: 3 resolutions for investors,” JPMorgan, January 10, 2025.

[3] Graham Capital Management, “Building Portfolio Resilience at the Macro Level,” January 2023.

[4] Joseph Burns, “Macro Hedge Funds: Zigging When the Markets Zag,” iCapital, October 19, 2023.

[5] BlackRock, “Hedge Fund Opportunities in a Rising Rates and Uncertain Market Environment,” August 2023. Global Macro performance represented by the Credit Suisse Global Macro Index.

The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the position of The Truth About Your Future or its affiliates. This content is provided for educational and informational purposes only and does not constitute investment, financial, legal, tax, or accounting advice, nor an offer, solicitation, or recommendation to buy or sell any security or other asset. Information is current as of the date of publication and may become outdated; no representation is made as to its accuracy or completeness. Publication does not constitute an endorsement of the author, the author’s firm, or any product or service referenced, and the author may hold positions in the assets discussed. Readers should consult their own qualified professionals before making any financial decisions.