Kettera Strategies' Heat Map for January 2024
In the first month of the year, markets saw a mix of performances across various sectors. Underlying fundamentals suggested an increase in supplies and slowing global demand growth for grains, yet many grains programs had short exposures, primarily in corn and beans.
In the equities sector, profits primarily came from long exposures to US and Japanese stock indices, with short Chinese indices. The US economy's unexpectedly strong employment data in early January caused a shift in sentiment from bearish USD to bullish, causing the USD to rise roughly over 2%. Notable contributors in the commodities sector for long term trend followers were long cocoa, short grains such as corn and soybeans, and long crude oil.
However, the fixed income positions were largely negative, with most programs having long exposures to various European debt instruments as yields rose (and the price of these instruments dropped). Currencies were mixed for long term trend followers, with some programs coming into January long USD versus most G10 units, which reversed sharply after the strong employment report.
Discretionary global macro programs slightly underperformed the broader benchmark in January, due to a reversal in the US dollar from weak to strong. The search results did not provide any information regarding the performance results for FX Specialists, Discretionary Global Macro Managers, Commodities - Agricultural Specialists, and Systematic Trend CTAs in January as reported by Kettera Strategies.
Kettera Strategies created style baskets for research purposes to track categories and classify programs on the Hydra Platform. The style basket for a class is created from 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. The performance of these style baskets is represented by arrows in the letter, indicating overall performance for the month.
It's worth noting that the indices and financial benchmarks shown are for illustrative purposes only, do not reflect the impact of advisory fees, and may be a month-to-date estimate if all underlying components have not yet reported. 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.
In conclusion, while January saw a mixed bag of performances across sectors, it serves as a reminder of the dynamic nature of financial markets and the importance of staying informed and adaptable. As we move forward, it will be interesting to see how these trends evolve and how they impact market performance in the coming months.
In the realm of technology and finance, innovative investing strategies could capitalize on the dynamic market performances witnessed in January, with long-term trend followers potentially benefiting from long positions in cocoa, short grains, and crude oil. Simultaneously, the sports industry might witness a surge in sponsorship deals, owing to increased advertising revenue from buoyant stock markets and a strengthening US dollar.
