Kettera Strategies' Heat Map for May 2020
Hedge Fund Performance in June 2025: Key Factors and Trends
In a recent analysis by Kettera Strategies, the performance of various hedge fund sub-strategies was found to be significantly influenced by market trend dynamics, volatility conditions, and sector-specific drivers.
Discretionary macro and quantitative macro strategies, both influenced by broad macroeconomic factors and central bank policies, can diverge depending on whether decisions are human discretionary or algorithm-driven. Quantitative macro, being more systematic, tends to be more sensitive to model signals and rapid shifts in market regimes.
Systematic trend programs, particularly long-term trend following systems, generally performed better in June 2025. However, some continued to experience negative returns due to prolongation of recent underperformance phases, reflecting the impact of mixed or choppy macroeconomic trends that limit clear directional signals.
Short-term trading programs, sensitive to high-frequency market volatility and liquidity conditions, typically perform closely tied to intraday or weekly market moves rather than longer macro trends.
For commodities and related hedge fund strategies, performance drivers were mixed, impacted by supply-demand imbalances and geopolitical factors influencing agricultural and energy prices.
Equities within the hedge fund space are affected by factors such as earnings growth, valuation shifts, and sector rotation, with volatility arbitrage and long volatility strategies capturing alternative risk premia amid uncertain market conditions.
Kettera’s analysis also suggests that volatility regimes and market trend clarity remain crucial determinants across these hedge fund categories, with performance variability arising from how each strategy type responds to changes in trend persistence, volatility spikes, and macroeconomic surprises.
In summary, market trend clarity, volatility conditions, and sector-specific drivers play a significant role in the performance of various hedge fund sub-strategies. The performance of systematic trend programs, for instance, is positively influenced by clear market trends, while short-term programs depend heavily on liquidity and volatility. Commodities reflect supply-demand and geopolitical influences, and equities depend on fundamental corporate and market sentiment factors. Overall, volatility and regime shifts remain key cross-strategy influences on returns.
[1] Kettera Strategies, June 2025 analysis.
- The performance of systematic trend programs, which are more sensitive to model signals and rapid shifts in market regimes, tends to be significantly influenced by clear market trends in the realm of finance and technology.
- When it comes to investing, understanding the impact of distinct sector-specific drivers, such as earnings growth, valuation shifts, and sector rotation in the equities market, is crucial for hedge funds in the contemporary technology-driven climate.
