Kettera Strategies' December 2024 Heat Map - A Representation of Key Trends and Investment Opportunities
In the world of finance, December 2024 saw a variety of trends unfold across different investment strategies. This guest article, published by AlphaWeek and owned by The Sortino Group, offers an insightful analysis of several key strategies.
1. Quant Global Macro: These strategies, which focus on macroeconomic trends and use quantitative models to analyze global markets, demonstrated mixed to positive performance. The strength of the US dollar against most G10 and emerging market currencies was a profitable position for many programs.
2. Systematic Trend: Systematic trend strategies, which use algorithms to identify and follow trends in financial markets, showed a positive trend overall. While short-term programs experienced marginal gains, longer-term holders outperformed.
3. Commodities Specialists - Agricultural: These strategies, which focus on agricultural commodities like corn, wheat, and soybeans, experienced losses in December. The short exposures in soybeans and soymeal were particularly significant contributors to the negative performance.
4. Currencies: Currency-focused strategies, which involve spot trading, futures, or options, performed exceptionally well. The US dollar continued to strengthen against nearly all major currencies, making it a profitable position for many programs. Gold, silver, and platinum, as a group, traded lower, benefiting those currency programs that included gold short positions.
It's important to note that the specific performance data for Quant Global Macro, Systematic Trend, Commodities Specialists - Agricultural, and Currencies strategies in December 2024, as reported by Kettera Strategies, is not accessible to us. However, Kettera Strategies created "style baskets" for research purposes to track the performance of various categories of quant global macro strategies on the Hydra Platform.
Energy trading was mixed, with more price-based programs losing on short positions in crude and products, while econometrically-based models were long and correct. In equities, performance was mixed for quant global macro strategies, with more agile programs able to catch the run up during the first half and flip to short during the year-end sell-off.
Long-term trend following programs generally performed well in December, with longer-duration programs outperforming medium-term programs. The yen was further weakened by comments from the Bank of Japan about delaying expected rate hikes. Rising bond yields in the US and hawkish comments by Chairman Powell during the mid-month Fed meeting kept the USD rising into year-end.
The views expressed in this article are those of the author(s) and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group. For specific performance data, it's best to consult Kettera Strategies' reports or other financial data sources directly.
Data-and-cloud-computing solutions could be beneficial for finance professionals looking to analyze the performance of different investment strategies, such as Quant Global Macro, Systematic Trend, Commodities Specialists - Agricultural, and Currencies. Technology can aid in identifying trends and patterns more efficiently, leading to faster and potentially more accurate investment decisions.
For instance, energy trading strategies benefited from econometrically-based models that were long on crude oil and products, demonstrating the importance of incorporating advanced algorithms into investment decision-making processes.
