Kettera Strategies' August 2025 Heat Map: A Review of Key Trends
In August 2025, the Hydra Emerging Manager Basket, a diverse portfolio of emerging hedge fund managers, showcased varied yet promising returns. Discretionary Global Macro managers, under the management of skilled professionals, generally shone, with many capitalising on concentrated trades in metals, rates, and certain currencies. Long precious metals, particularly gold and silver, was the standout trade in the commodities sector. Several funds benefited from long positions in short-duration U.S. Treasuries (2Y). However, it's important to note that past performance in the Hydra Emerging Manager Basket is not necessarily indicative of future returns. The financial benchmarks used by the Basket are provided for illustrative purposes only and do not reflect the impact of advisory fees. Long equities outperformed as indices rose in the US, Asia, and slightly in Europe. Conversely, agricultural funds faced a challenging month, driven largely by positioning misalignments across the grain and livestock markets. The energy and equity exposures appeared minimal or neutral for most managers. Some managers were hurt by long exposure to the long end of some European yield curves, particularly the German curve. Short U.S. dollar exposure via long GBP positions and some commodity-focused currencies contributed positively for some funds. Both discretionary fundamental and systematic FX managers struggled in August, with most programs posting negative performance. The Hydra Emerging Manager Basket rebalances weightings among managers annually, with exceptions for extraordinary events. Manager weightings in the Basket are equal for any approval category, and they are not increased over time except for going from a "pending" to a fully "approved" program. Weightings in the Basket are not discretionary, and they are not reduced unless the manager is de-listed or shuts its doors. It's worth mentioning that the long term systematic trend performed well in August, generally posting gains in multiple sectors. The views expressed in this article are those of the author(s) and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group. The names of the funds observed and reported by Kettera Strategies in the "Commodities Specialists - Agricultural Traders" category are not available in the provided information. August's trading environment rewarded the patience of longer-term strategies. Long positions in precious metals, particularly gold and silver, were consistent profit centers for several managers. In conclusion, the Hydra Emerging Manager Basket delivered a mixed bag of results in August 2025, with some managers thriving in the commodities and equity markets, while others faced challenges in the agricultural and FX sectors. As always, it's crucial to remember that past performance is not a guarantee of future results.
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