July 2024 Kettera Strategies Tactical Overview
In a recent report, Kettera Strategies has revealed the performance trends for various investment categories in July 2021. The findings provide valuable insights into the market performance of Systematic Trend Programs, Discretionary Global Macro Managers, and Commodity Specialists.
Systematic Trend Programs experienced positive performance, primarily driven by strong trends in commodities and currencies. The momentum in energy and metals, in particular, contributed to gains in systematic trend strategies.
Discretionary Global Macro Managers, however, had mixed results. Performance was influenced by divergent views on inflation, interest rates, and growth prospects. Some managers benefited from their positioning in interest rate and currency markets, while others faced headwinds due to market volatility and geopolitical uncertainties.
Commodity Managers – Agricultural Specialists encountered challenges in July 2021, as agricultural prices showed some softness and volatility. Weather-related uncertainties and shifting demand patterns contributed to mixed or slightly negative returns in this segment.
On the other hand, Commodity Managers – Metals & Energy Specialists generally delivered positive returns. The surge in energy prices and robust metals market dynamics were key drivers behind the favorable performance in this group.
The Japanese yen saw a significant rise in July, reaching levels not seen since mid-March. This "risk off" unwinding of the carry trade was a major factor in the challenging month for most systematic trend following programs.
The USD's performance was mixed, generally down versus the majors but up versus commodity currencies in July. Only gold was noticeably positive among the major industrial commodities.
The performance of Kettera Strategies' FX specialists was largely flat to positive in July, with performance largely depending on a manager's positioning in the yen. Nimble metals traders were short copper, nickel, and zinc in July due to weak fundamentals and technical internal market structure.
The indices and financial benchmarks shown are for illustrative purposes only and do not reflect the impact of advisory fees. The arrows in the letter represent the style basket’s overall performance for the month.
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The style baskets presented in the letter are research tools created by Kettera Strategies for tracking categories and are not investible products or index products. The weighting of a program in a style basket depends upon into which of the three groups the program falls.
The overall performance of a style basket is determined by the monthly returns (net of fees) of programs that are either currently or formerly on Hydra, or under review with an expectation of being added to Hydra. Programs more heavily weighted in fixed income did well in July, particularly on long US and European exposures as markets started pricing in aggressive cuts by the Fed and the ECB starting in September.
For more detailed figures or further insights, please feel free to ask!
In light of the report by Kettera Strategies, it's worth noting that Commodity Managers – Metals & Energy Specialists benefited from the surge in energy prices and robust metals market dynamics, leading to positive returns in July 2021. Additionally, expanding investment opportunities in technology could potentially provide attractive returns in the future, especially considering the rapid growth and innovation seen within the sector.
