Kettera Strategies' Heat Map for February 2024
In the financial landscape of February 2021, various hedge fund strategies displayed diverse performance patterns. This article offers an overview of the key strategies and their respective outcomes.
Kettera Strategies, a research organisation, created style baskets for analysis and comparison purposes. These baskets are not investible products or index products, but are used for research on programs on the Hydra Platform. The weighting of a program in a style basket depends on whether it is currently or formerly on Hydra, or under review with an expectation of being added to Hydra.
One of the standout performers was the agricultural sector. Commodities managers specialising in agricultural commodities experienced one of their best months in memory. The agricultural sub-sectors, including grains, livestock, and softs, saw significant gains. In particular, long positions in cocoa experienced a 35% rally in February.
Short positions in grains (corn, soybeans, and soymeal) were also profitable, as many fundamental traders saw more room to fall in the downward trend.
In the energy sector, the better-performing systematic and discretionary energy-focused programs were short natural gas and/or European energy markets.
In metals, most of the fundamental discretionary programs underperformed, with losses being most frequent in long copper and long gold exposures.
Long positions in global equity indices (US, Europe, Japan) were popular winning positions. However, many programs were positioned for a steepening of the yield curve, but this did not occur.
Discretionary global macro underperformed in February, with fixed income and short-term rates (STIR) being the worst sector.
Systematic Trend Programs, known for their strength in volatile or trending markets by modeling and exploiting price trends, displayed profitable performances in many long-term trend programs during this period.
The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group. It's important to note that the indices and financial benchmarks shown are provided for illustrative purposes only and do not reflect the impact of advisory fees.
Hypothetical performance results of style baskets have many inherent limitations, including the fact that they are prepared with the benefit of hindsight and do not account for the impact of financial risk in actual trading. The search results do not provide specific information or performance data for the month of February 2021 related to Systematic Trend Programs, Discretionary Global Macro Managers, Commodities Managers - Agricultural Specialists, and Commodities Managers - Industrial Commodities Specialists (energies & metals). Accessing specialized hedge fund industry databases or reports from that exact period would be necessary to obtain detailed top-performing strategies for February 2021 in these specific hedge fund sub-strategies.
The arrows in the style baskets represent their overall performance for a month, with a solid red down arrow indicating a largely negative performance.
- In the realm of technology, it would be intriguing to explore how Systematic Trend Programs, which typically excel in volatile or trending markets, might have fared in tech-oriented trend programs during February 2021.
- As the financial industry looks towards innovative avenues for investing, investigating the impact of technology on agricultural commodities trading, such as precision farming and automated trading systems, could offer valuable insights, following the outstanding performance of agricultural sector hedge funds in February 2021.
