(In paragraph 3, adds "equity" before portfolio managers)

By Carolina Mandl

NEW YORK, March 20 (Reuters) - Citadel's flagship hedge

fund Wellington has reduced its losses after a rough start to

March, as uncertainties around President Donald Trump's economic

policies triggered a selloff in U.S. equities, according to a

source familiar with the matter.

The fund ended March 14 down under 1% in the year, roughly

halving a 2% loss it had posted through March 6, with most of

the recovery coming from U.S. equities.

The recovery comes as Citadel's founder Ken Griffin told

senior management to "play offense" earlier this month amid the

selloff, increasing capital allocation to roughly a quarter of

the firm's U.S. equity portfolio managers.

Bloomberg reported earlier on Griffin's message.

Hedge funds unwound positions at the largest amount in years

earlier in March after U.S. major stock indexes plummeted over

fears tariff policies will drive the world's largest economy

into a recession.

The forced unwinding took a toll on hedge funds, including

multi-strategy firms like Citadel. JPMorgan said in a recent

note that on average multi-strategy hedge funds were down 3.2%

this month through March 10, but they gave up part of the losses

later and were down 0.7% in the month through March 13.

Citadel declined to comment.