The trading world isn’t as easy as it used to be for global macro funds. The Hedgefund.net index of 131 macro funds is down 1.13% this year, after last year’s 19.99% return. Macro funds, unlike most hedge funds, invest across all bond, stock, and commodity asset classes, using a variety of fundamental and quantitative strategies.

For many years, macro funds defined popular understanding of hedge funds, especially in the 1980s, as investors like George Soros, Julian Robertson, Michael Steinhardt, and Bruce Kovner controlled more than $12 billion each, making massive bets on stocks and bonds [Messrs. Kovner and Steinhardt are investors in The New York Sun].

These macro-trading pioneers made and lost mind-boggling sums. In 1992, Mr. Soros’ flagship Quantum fund made $1 billion in a single trade betting on the devaluation of the British pound; in 1998, his fund lost $2 billion during the Russian debt crisis.

The $466 million Conquest Macro fund doesn’t make billion dollar bets on the pound or any other asset class, but it does trade all sectors. Portfolio manager Marc Malek said “the somewhat difficult markets” this year are attributable to an unprecedented drop in volatility across all sectors. The fund is down 7.16% this year. “If nothing moves, there’s not a lot of opportunity for us, or many of our peers,” he said. The firm manages a total of $800 million in three separate funds.

When there is volatility – a tendency for a security to sharply increase or fall in price over a short period – the quantitative strategies of the Conquest Macro fund does well, as evidenced by the 43.35% return in 2000 and the 35.32% performance in 2002.

Mr. Malek described the macro sector as “stuck between two sides of an argument,” referring to the course of the American economy.

“This isn’t speculation – corporate bonds, global stocks, and global bonds are going to move based on perceptions” of the sustainability of American economic growth, he said. “The data is giving us no direction, so people are evenly split between people who see a continued expansion and those who see a contracting economy,” he said.

Being a quantitative player means Mr. Malek doesn’t have to have a bias or opinion on issues like upcoming releases on employment data and inflation. “The beauty of being quantitative is that we don’t care which way it moves, as long as it moves,” he said.