June Returns Robust In Tactical Asset Allocation Strategies
Sneak peek at June hedge fund and managed futures returns from Kettera Hydra Platform Investor Letter.
Kettera Hydra platform gives qualified investors the ability to access top-tier fully vetted macro, managed futures, FX and hedge fund managers at lower investment minimums and the same fee structure as direct managed accounts.
The platform separates the "wheat from chaff" and only lists best-in-class managers. Kettera conducts rigorous due diligence on each manager before a manager is approved on the platform.
Breakdown of Hedge Fund Returns
As indicated by the Style Heat Map above, for the first time in the history of publishing this monthly analysis, all Hydra Style Baskets were positive on the month. As regular readers have noted, the “arrows” we place on strategies in the Map are an average of our own Style Basket and the style benchmark we use to track the relative performance of that basket. Nearly all of the style benchmarks were also positive, except for two categories: Volatility Traders and Fixed Income programs. Perhaps this signals that liquid diversifying alternatives have not just regained their footing but are coming back to their role of providing diversifying alpha to investor portfolios.
Top Performers on Hedge Fund Platform
*Past performance is not indicative of future results. Not Investment Advice.
Kettera Strategies Hedge Fund Platform Letter
#1 Short-term and higher-frequency programs fared well - with some programs having their best month of the year so far. With the exception of FX and agricultural markets, nearly all sectors offered these managers opportunity.
#2 Although generally positive on the month, many global macro managers – both discretionary and quant - seemed to be caught off-guard by the strong rally in equities, as well as the thin, choppy back-and-forth movement in FX. Most macro fundamental data indicated a tepid, “topping off” stock market, and many managers were not set up to take advantage of the moves that ensued.
#3 Trend following strategies continued to work well in June. Strong rallies in equities drove the bulk of the positive performance.
#4 FX programs, while fair performers overall, had a more challenging month in June. Exchange rates have been, and continue to be, quiet and choppy. The volatility – both historical and implied – of these markets has been at historic lows. In contrast, it was an exciting month for investors that consider gold and cryptocurrencies “currencies,” as crypto coins rallied alongside gold amidst central banks taking a more dovish tone.