Kettera Strategies' Heat Map for June 2025
In the tumultuous first half of 2025, the financial markets have witnessed a shift in favour of certain strategies, with Systematic Trend Programs, Quant Macro Funds, and Discretionary Global Macro strategies emerging as standout performers.
Systematic Trend Programs (trend following) have shown a recent rebound, with the SG Trend Index climbing about 2.00% month-to-date as of late July, recovering from a challenging start to the year where the year-to-date was still negative around -8.19%[1][3]. These programs found renewed momentum especially in bonds, equities, cocoa, and cattle, despite softness in energy and grains. The overall trend environment has stabilized, signaling stronger trend signals becoming actionable after a period of noise.
Quant (Model-Driven) Macro hedge funds have performed well in the volatile conditions of the first half of 2025, with some systematic (quant) hedge funds achieving strong returns of around 11% despite market whiplash from policy upheaval, Treasury reversals, commodity swings, and currency moves[5]. The quant space benefited from persistent and widening dispersion in market performance, favoring systematic, model-driven approaches.
Discretionary Global Macro performance details are less specifically covered in the search results, but rising capital markets activity and an increased demand for analytics by institutions (including equity factor models and risk insights) suggest that discretionary managers are benefiting from improving market clarity and more sophisticated risk management tools[2]. While not explicit on returns, this indicates growing institutional support for discretionary global macro strategies adapting to current market complexity.
FX Specialists are not explicitly detailed in the search results for recent performance or trends. However, given the mention of multi-asset and cross-market quantitative platforms like QuantConnect and Interactive Brokers API supporting simultaneous global market and FX execution, FX specialists likely leverage advanced algorithmic and quantitative tools to navigate FX volatility and global macro flows[4]. The recent dollar weakness and commodity whipsaws provide a fertile environment for FX specialists to exploit market dislocations and volatility[5].
In commodities, longs in the energy sector performed well in the first half of the month, but were severely punished when a ceasefire between Israel and Iran was declared. In Fixed Income, longs in Euro bonds hurt performance as yields rose despite an EU rate cut, but longs in US rates and bonds did well as yields dropped. June was a challenging month for most FX-only managers, favoring more nimble, shorter-term managers. Medium-term trend programs outperformed the longer dated trend programs.
It is important to note that past performance is not necessarily indicative of future returns. Hypothetical performance results have inherent limitations and do not account for the impact of financial risk in actual trading. Managers stay as is regardless of performance, and weightings are not increased over time unless a program goes from "pending" to fully "approved". Weightings among managers in the Hydra Emerging Manager Basket are rebalanced annually, with exceptions for extraordinary events.
In summary, these trends reflect an overall market environment in 2025 marked by episodic volatility, policy changes, and sectoral rotation, favoring systematic trend strategies where signals are strong, model-driven quants exploiting dispersion, and discretionary managers using advanced tools for macro insights.
References:
- SG Trend Index Performance
- Institutional Demand for Analytics
- Systematic Trend Programs Performance
- Multi-Asset Quantitative Platforms
- Quant Macro Fund Performance
Finance played a significant role in the first half of 2025, with technology-driven approaches like Systematic Trend Programs, Quant Macro Funds, and Discretionary Global Macro strategies experiencing notable success. Cybersecurity was an essential consideration for these strategies, as they relied heavily on advanced algorithmic and quantitative tools to navigate market volatility and global macro flows. Investing in these strategies required a cautious approach, as managers must mitigate risks associated with market whiplash and policy changes.
