Strategic Heat Map by Kettera - December 2021 Edition
In the financial world of 2025, quantitative macro and systematic trend strategies have been a standout success, posting positive returns throughout the year. These strategies, which employ algorithms and models to make investment decisions, have shown impressive performance across various asset classes such as equities, fixed income, currencies, and commodities.
Quant Macro and Systematic Trend
The success of these strategies can be attributed to profitable trends in currencies and equity indices. Faster trend-followers with significant stock index and currency exposure have outperformed, particularly in June and the first half of 2025. However, energy markets and some commodities have experienced reversals or underperformance, leading to offsets in gains. Signals from proprietary quants even suggest a potential for double-digit returns in 2025 for equity benchmarks such as the S&P 500, though this depends on resolving trade conflicts and tax legislation.
Equities
Equity positions have been a significant source of gains, particularly in the technology, AI, financial, and industrial sectors. Asian and tech-heavy indices have shown broad gains, restoring bullish setups for trend followers. Some systematic strategies have held reduced equity index hedge positions, balancing exposure with sectoral risk.
Fixed Income
Fixed income themes have contributed mixed returns. Positive drivers include interest rate receiver positions in the US and UK, and G3 steepener trades. However, some bear flattener trades, such as Japanese Government Bonds, and short asset swaps have underperformed. In general, a long bias in bonds remains but with some mild pullbacks and position reductions.
Currencies (FX)
FX strategies have benefitted substantially from a short USD bias, gaining against EUR and select emerging market currencies such as the Brazilian real (BRL) and Mexican peso (MXN). However, challenges occurred with short positions in the Chinese yuan (CNH) and Swiss franc (CHF). USD weakness has provided some relief for risk currencies and helped systematic FX gains continue.
Commodities
Commodities themes have underperformed slightly, notably with short oil positions. Losses from some credit and equity hedges have offset gains elsewhere. Within commodities, long positions in agricultural commodities, silver, and copper have delivered gains, while energy (oil, natural gas) and some metals (palladium, platinum) have lagged with ongoing selling pressure in grains and softs, with mixed strength in coffee and cocoa.
Shorter-term Strategies
Faster trend following approaches, which focus on shorter holding periods, have outperformed traditional longer-term CTAs, leveraging quicker shifts especially in equities and currencies.
Challenges for Shorter-Term Strategies
However, shorter-term strategies have struggled with choppy markets, reversals, and stop-outs, particularly in equities and fixed income sectors in North America and Europe.
In conclusion, the performance landscape for these strategies in mid-2025 reflects strength in equities (especially tech and emerging markets), beneficial fixed income positioning on interest rate themes, FX gains driven by short USD positioning, and mixed commodity outcomes favoring certain metals and agriculture but pressured by energy shorts.
Finance and investing in quantitative macro and systematic trend strategies have been a booming business in 2025, particularly in the equities and FX sectors, due to their success in posting positive returns. Equity positions, specifically in the technology, AI, financial, and industrial sectors, have been a significant source of gains, contributing to the overall strong performance. Moreover, FX strategies have benefited substantially from a short USD bias, gaining against various currencies like the Euro and emerging market currencies.
