The optimism that spurred markets at the start of the year prompted many fund managers to sell their reliable but boring defensive stocks in favour of more economically exposed cyclical names in areas such as mining and advertising.
However, as global growth has stuttered and the eurozone crisis has reared its head, markets have tumbled.
Fidelity’s Trevor Greetham is just one manager who has been caught out by rip-sawing markets. He has just recently cut his exposure to equities only a matter of weeks after buying up more stock in March.
"It seems everyone these days is a market timer," commented Ben Leyland, co-manager of the FE five-crown rated JOHCM UK Opportunities fund.
Trying to predict the ebbs and flows of the economy has led many investors to question whether a macro approach has become obsolete.
According to the latest FE Trustnet poll, only one in four investors prefer a manager with a macro approach to investing.
Leyland believes a bottom-up stock-picking approach is better suited to the current market environment. "The difficulties of macro forecasting and the accelerating pace of structural change, predominantly driven by technology, has led equities to be viewed as an asset class for short-term speculation rather than long-term investment," he said.
"This has created a tremendous opportunity for investors who are prepared to go ‘back to basics’."
"It seems these days that people think you’re only as good as your last quarter, but this is counter-productive. We have a five-year time horizon, and largely ignore what’s going on in the macro, instead focusing on the individual company."
However, there are a handful of macro managers who have been able to maintain their performance in spite of sentiment-driven false rallies and erratic news and data flow.
Hugh Hendry heads up the CF Eclectica Absolute Macro fund. He is a high-conviction manager who tends to be highly uncorrelated to the rest of the market.
Data from FE Analytics shows that since the start of 2011 the fund has returned 8.75 per cent compared with a 0.58 per cent gain from the FTSE All Share index.
Performance of fund vs sector since 1 Jan 2011
Source: FE Analytics
Hendry uses derivatives, as well as alternative and short-selling strategies, to hedge against risk and take advantage of any opportunities that arise.
His fund's TER is 2.74 per cent and while this is considerably higher than average, unlike many Absolute Return investments, there is no performance fee.
Investors looking for a macro fund with a simpler long-only mandate may want to consider the CF Liontrust Macro Equity Income fund.
FE Alpha Managers Jan Luthman and Stephen Bailey focus predominantly on macroeconomic factors and deliberately avoid complicated bells and whistles in their approach.
Their record over the long-term has been impressive, beating the FTSE All Share and the average UK Equity Income fund in seven of the last eight calendar years.