[ A L G O R I T H M I C T R A D I N G S U R V E Y ]
Algo trading growth streak continues as providers see record high hedge fund ratings
In this year’ s iteration of The TRADE’ s Algorithmic Trading Survey: Hedge Funds, providers have continued the trend of growth which began last year following two consecutive years of decline from 2022 to 2023.
The global hedge fund industry has demonstrated remarkable resilience and evolution in recent years, with assets under management( AUM) expected to reach well over $ 5 trillion before the end of 2025. Despite facing headwinds from rising interest rates, geopolitical tensions and increased regulatory scrutiny, the hedge fund community has adapted well through strategic diversification and technological innovation. Still, the ongoing trend of performance dispersion has continued, and in fact widened even more, with toptier managers generating substantial alpha while many other smaller funds struggle to justify fee structures in an increasingly competitive landscape.
Similar to other areas of financial services, the hedge fund market has accelerated adoption of innovative technology, including artificial intelligence and, often, taking the lead in incorporating various alternative data sources to drive further growth. Not surprisingly, these initiatives have clearly impacted their overall adoption of algorithmic trading. Ratings of algorithmic trading providers from hedge fund respondents in 2025 represent the highest score since the inception of the survey, with an average score of 5.90, continuing the trend of growth which began last year after two consecutive years of decline starting in 2022. The geographic distribution of respondents in this year’ s survey did not deviate too much from previous years, with the
UK( 37 %) and Europe( 30 %) representing the largest pool of respondents, followed by North America with 19 %. The biggest increase came from the APAC region, sitting at 10 %, and representing a 4 % growth in participation from the previous year. Regional trading activity among respondents also remains consistent with previous years, with the majority focused on major markets such as Europe( 85 %), North America( 78 %) and APAC( 49 %), as well as trading some emerging markets in regions such as Latam( 25 %) and MEA( 14 %).
In terms of asset classes, as in 2024, 94 % of all hedge fund managers who responded in the survey trade equities. Other instruments traded include ETFs( 65 %), fixed income( 39 %), FX( 38 %) and listed derivatives
60 // TheTRADE // Q2 2025