Kettera Strategies Heat Map - March 2025
For the month of March 2025, the following summaries highlight five of the ten style categories that we track.
Discretionary Global Macro
Most of the discretionary global macro managers we track delivered positive returns in March - with many outperforming due to concentrated, high-conviction positions as opposed to broad diversification. Some of these programs posted their highest monthly return in years. Core positions tended to include long 2-year or 5-year U.S. Treasuries and short USD positions. The profitable returns of two managers in particular were driven by a simultaneously long position in U.S. Treasuries and commodities (especially precious metals), and short U.S. equities—a rare combination but a profitable one in March due to China-driven commodity demand and U.S. weakness. Two others profited from bearish U.S. equity positions and interest rate differentials (e.g. short European bonds and long EUR/USD). Some of the more Asia-focused programs saw solid returns in Asia-focused positions, particularly in FX and local interest rates. Those managers that faced challenges were those that tended to stick to long equity or long-duration bond positions, especially when volatility forced deleveraging. Overall, those who maintained concentrated themes—hallmarks of classic discretionary macro—captured the most alpha, while more muted or overly hedged portfolios underperformed.
Commodities - Grains and Livestock
The returns of most discretionary grains and livestock traders were close to flat overall in March, despite widespread market turmoil, primarily due to long corn exposures based on strong underlying fundamentals. These were implemented largely using spreads and directional options structures, U.S. export numbers have been stronger than expected, and the U.S. remains the cheapest corn offer in the world. This was not enough, however, to support prices as corn ended March down roughly -2.6%. Grains trading overall was choppy and mostly sideways making it difficult to build conviction either way, especially with the threat of tariffs/no tariffs coming out of Washington DC. Another meaningful exposure was to livestock, namely live and feeder cattle markets, which achieved new highs mid-month before retracing. Discretionary livestock traders were cautiously positioned short both using calendar spreads but closed positions before prices sold off. The timing was unfortunate as tariff announcements saw prices break lower later in March.
Currency Specialists
Returns of currency managers last month were a mixed bag, as most FX specialists appeared to face challenges. But there were some notable exceptions – including some of the FX programs on our platform (or pending on-boarding). Systematic short-term programs appeared to deliver either small gains or modest losses, primarily due to false breakouts and limited directional follow-through in the G10 majors. Those short-term programs that ended the month net profitable tended to generate it in precious metals and not exchange rates. Some discretionary macro managers with FX exposure, such as those holding long EUR/USD positioning – anticipating a weaker dollar – some gains (particularly if executed through long options). Overall, managers who relied on price momentum or short-term signal models faced challenges, while those using fundamental, options-based or macro-thematic trades found more success in their exposures.
Long Term Trend Followers
Long term systematic trend followers had a challenging month, with the biggest losses coming from long equity index (largely European indices) and long US dollar positioning. Most systems came into March long USD saw it weaken almost immediately at the start of the month - on inflation fears and escalating tariff talk out of Washington. Short euro vs. USD was one of the most costly positions for trend followers across the board, as the Euro rallied sharply against the dollar and most other currencies following Germany’s announcement of dramatic fiscal spending increases (infrastructure and defense). Of the few profitable positions, the best performers were long precious metals, most notably gold as it rallied above $3100/oz, but also in silver, palladium, and platinum. Long positions in base metals (e.g. copper) were also typically winners. A few programs with more exposure to physical commodities did well to be long live and feeder cattle. Fixed income bonds and rates trading was mixed and did not appear to be a driver either way.
Kettera Strategies Heat Map - March 2025
Past performance is not necessarily indicative of future results. See notes at end of this document for details on the construction of the hydra "baskets" and the benchmark used for each style class. Also note that some baskets may contain managers that have not yet reported by this date. *=less than 75% reported. **=less than 75% reported and absence of a core manager's return.
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Footnotes
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Kettera Strategies. The information set forth herein has been obtained or derived from sources believed by the author to be reliable. However, neither Kettera nor the author make any representation or warranty, express or implied, as to the information's accuracy or completeness, nor do Kettera or the author recommend that the attached information serve as the basis of any investment decision. This is provided to you solely for informational purposes only and does not constitute an offer or solicitation of an offer, or any advice or recommendation, to purchase any securities or other financial instruments, and may not be construed as such.
Kettera Strategies LLC is a Member of the National Futures Association and registered as a Commodity Pool Operator and only provides services to Accredited Investors who are Qualified Eligible Persons as defined in section 4.7 of the Commodity Exchange Act. This document, any attached document and cover email are being furnished to you on a confidential basis and may not, without prior written consent of Kettera Strategies LLC be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the intended recipient of this email. This document, and any related documents or emails, are neither offers to sell any securities, nor solicitations of an offer to invest in any fund or product.
For the “style classes” and “baskets” presented in this letter: The “style baskets” referenced above were created by Kettera for research purposes to track the category and are classifications drawn by Kettera Strategies in their review of programs on and for the Hydra Platform. The arrows represent the style basket’s overall performance for the month (e.g. the sideways arrow indicates that the basket was largely flat overall, a solid red down arrow indicates the basket (on average) was largely negative compared to most months, etc.). The “style basket” for a class is created from monthly returns (net of fees) of programs that are either: programs currently or formerly on Hydra; or under review with an expectation of being added to Hydra. The weighting of a program in a basket depends upon into which of these three groups the program falls. Style baskets are not investible products or index products being offered to investors. They are meant purely for analysis and comparison purposes. These also were not created to stimulate interest in any underlying or associated program. Nonetheless, as these research tools may be regarded to be “hypothetical” combinations of managers.
Further notes on Hydra Emerging Manager Basket: Weightings among managers were rebalanced every year, with exceptions for extraordinary events (e.g. the Covid market collapse). Weightings are not discretionary. Manager weightings were not increased over time except for going from a “pending” to a fully “approved” program; weighting reductions only occurred if the manager was de-listed or shut its doors – otherwise the managers stayed as is regardless of performance. Weightings are equal for any approval category: e.g. all fully approved managers may get a X% weighting, regardless of volatility/exposure levels or correlation with other strategies.
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any product or account will achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
Benchmark sources:
1- With Intelligence Systematic Macro Hedge Fund Index
2- With Intelligence Macro Hedge Fund Index
3- The Societe Generale Trend CTA Index
4- The Societe Generale Short-term Traders Index
5- The Barclay Currency Traders Index
6- Blend of Bridge Alternatives Commodity Hedge Fund Index and BarclayHedge Discretionary Traders Index
7- The Barclay Agricultural Traders Index
8- The Nilsson CTA Commodities Index
9- Blend of With Intelligence Volatility Arbitrage Index and With Intelligence Long Volatility Hedge Fund Index
10- Blend of With Intelligence Institutional Equity Hedge Multi Strategy Index and BarclayHedge Multi Strategy Index
Indices and other financial benchmarks shown are provided for illustrative purposes only, are unmanaged, reflect reinvestment of income and dividends and do not reflect the impact of advisory fees. Index data is reported as of date of publication and may be a month- to-date estimate if all underlying components have not yet reported. The index providers may update their reported performance from time to time. Kettera disclaims any obligation to verify these numbers or to update or revise the performance numbers.
Past performance is not necessarily indicative of future returns.
Copyright © 2025 Kettera Strategies, all rights reserved.
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