Strategic Heat Map by Kettera - April 2024 Edition
In the financial world of April 2021, FX specialists and systematic trend programs stood out as strong performers.
Discretionary global macro managers generally prospered, with gains in commodities and currencies. Notably, there was a long position in gold and copper, as well as a short position in the Japanese Yen against the US Dollar. However, fundamentals-based, discretionary grains traders underperformed due to short-term rallies that impacted their longer-term bearish picture for corn and soybeans.
When it comes to systematic trend programs, these strategies often focus on futures markets across commodities, currencies, equity indices, and bonds. In April 2021, commodities and equity indices were generally strong performers, with notable trends in energy and metals markets.
Systematic trend programs employing medium to long-term trend following and machine learning techniques, such as Mike Stendler's diversified approach with 45 models over 70+ markets, typically allocate across these asset classes, gaining primarily from commodity and equity trend persistence.
In the realm of FX, systematic programs had a successful April, capturing the strong US Dollar against most G10 and emerging currencies, particularly in short Japanese Yen versus USD-British Pound-euro. Momentum models also performed well by staying short the Japanese Yen versus the US Dollar, British Pound, and Euro.
In the commodities sector, a few programs more weighted towards livestock markets did well trading cattle on short-term weakness. In the industrial markets (Metals/Energies), most programs appeared to capture the strong rally in gold.
Discretionary energy programs also thrived in April, whether focused on natural gas or crude and refined products. Directional and long-biased discretionary metals programs were generally profitable, with gold rallying on inflation concerns, escalating geopolitical concerns, and heavy retail buying in China.
However, it's important to note that the search results do not provide specific performance data for top-performing systematic trend programs in April 2021, or which asset classes contributed most to their gains during that month. For a detailed and specific assessment, one would typically need access to monthly performance reports from major systematic trend managers like Winton, AQR, or Campbell & Company for April 2021.
The Japanese Yen eventually rallied back from 34-year lows against the USD in April, with many discretionary traders closing out their positions in the Japanese Yen before realizing profits. Despite the unexpected timing of the yen's rally, systematic FX programs outperformed their more discretionary and fundamental peers in April.
In summary, April 2021 was a profitable month for FX specialists and systematic trend programs, with commodities and currencies leading the way. However, for a comprehensive understanding of the performance of specific programs, access to monthly performance reports from major trend managers is necessary.
Investing in technology-driven, systematic trend programs within the field of finance yielded significant returns in April 2021, particularly in the commodities sector where series of strategies profited from the strong rally in gold. Interestingly, some discretionary sports enthusiasts capitalized on the short-term weakness in the livestock market by trading cattle.
