Kettera Strategies' Heat Map for October 2021
In October, financial markets witnessed a surge of activity, with various strategies and sectors reaping significant profits.
The equities sector, in particular, shone brightly, yielding the most profits for many investors. This trend was reflected in the positive performance of equities indices. The Eurekahedge-Mizuho Multi-Strategy Index, a benchmark source for the month, mirrored this upward trajectory.
Many listed managers capitalised on these rallies, with metals specialists on Hydra being particularly successful. The metals and energy markets experienced significant rallies, with crude oil up by 11.3%, copper by 6.5%, ethanol by 11.0%, silver by 8.1%, and others.
Long positions in precious metals bull spreads and tactical shorts in base metals proved to be successful strategies for some managers. However, the performance of shorter-timed systems was more prominent in fixed income and short-term rates.
The "style baskets" mentioned in various letters are research tools created by Kettera for analysis and comparison purposes, not investible products or index products. Unfortunately, there is no publicly indexed data available on Kettera Strategies' top performing commodities or strategies for October 2020.
FX markets and commodities were the primary sources of returns for profitable managers in October. The CBOE Eurekahedge Relative Value Volatility Hedge Fund Index, the Eurekahedge AI Hedge Fund Index, the Barclay Crypto Traders Index, the BarclayHedge Currency Traders Index, and the BTOP FX Traders Index all saw positive performance.
Natural gas peaked early in October, then sold off dramatically, providing opportunities for nimble traders. The biggest outperformer in the short-term bucket was a systematic manager that averages over days and trades a diversity of market sectors.
It's worth noting that longer-timed systems and those with greater diversification appeared to perform better than shorter-timed systems. In October, there was no clear theme in the performance of systematic trend programs, with many sources of returns varying.
The BarclayHedge Discretionary Traders Index, Barclay Ag Traders Index, and NilssonHedge Commodities CTA Index also showed positive performance in the month. Fixed income, particularly on the shorter end of the curve, was the biggest detractor across the board, as global short-term rates spiked abruptly.
A disclaimer states that the indices and other financial benchmarks shown are for illustrative purposes only and do not reflect the impact of advisory fees. 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.
Investors in the equities sector found success, reaping profits as equities indices showed positive performance. Some managers capitalized on this trend by implementing long positions in precious metals bull spreads and tactically shorting base metals, which proved to be profitable strategies within the investing sphere.
