Systematic and trend-following hedge funds are the top performers so far this year.
Many of these investors, often called commodity trading advisors, or CTAs, posted strong gains in February and have posted double-digit jumps through the first two months of the year — albeit after several suffered through a rough 2023.
Systematic long-term trend-following strategies seek high absolute returns in rising and falling markets, investing in futures contracts linked to a diverse range of commodities and financial assets, according to several databases.
One of the hottest CTA these days is Paul Mulvaney’s Mulvaney Global Markets Fund. It surged 45.62 in February and is now up 48.63 percent in 2024, two databases show. The strong start comes on the heels of a nearly 90 percent gain last year and a roughly 33 percent return in 2021. The fund has compounded at 17.18 percent per year since its 1999 inception, according to a private database.
Elsewhere, DUNN Capital’s World Monetary and Agriculture Program climbed 19.58 percent in February and was up 30.66 percent through the first two months, the firm says. It manages a little more than $900 million. WMA Institutional — the half-leverage version of the WMA strategy — posted a 9.38 percent gain last month, boosting its rise for the year to 14.57 percent. It managed $514 million at the end of February.
According to its February client report, that month’s performance was driven by “sizeable gains in agriculturals and stocks, along with moderate gains” in fixed income, currencies and other investments. The gains were “slightly” offset by small losses in metals and volatility. DUNN said its overall risk exposure expanded incrementally in February.
“Net long stocks continue to be the most substantial exposure in the portfolio, followed by net short agriculturals,” the firm noted. “Net short fixed income, net long energies, and net short metals are all of similar, moderate sizes.” It added that small positions are held in net short currencies against the U.S. dollar and long VIX.
Several other funds are also enjoying strong years.
For example, the Tulip Trend Fund is up a little more than 29 percent over the first two months of 2024. Its trend strategy “provides access to directional trading strategies across a highly diversified global portfolio of futures and forwards,” according to a hedge fund and CTA database.
Aspect Capital’s Aspect Diversified Fund was up about 13.5 percent through the first two months of the year, per the database. The firm describes this as “an enhanced systematic medium-term trend-following program.” It operates in more than 230 contracts in more than 180 markets across eight different asset classes.
QMS Capital’s QMS Diversified Global Macro Fund was up 11 percent through February. The systematic, long-short investment strategy trades in highly liquid global futures and forwards, including equity indices, sovereign rates/bonds, commodities, and currencies, according to the private database.
Elsewhere, the Lynx Bermuda fund is up 11.54 percent for the year, per HSBC’s database.