Tactical Analysis by Kettera Strategies - July 2021 Edition
July 2025: Modest Gains for Systematic Trend Programs and Discretionary Global Macro Funds
In July 2025, systematic trend programs, also known as Managed Futures, posted a modest positive return of +0.34%, marking their second consecutive month of gains after a volatile first half of the year[1]. Despite this rebound, they remained down -7.31% year-to-date, indicating ongoing challenges but signs of stabilizing performance.
In contrast, discretionary global macro programs did not have explicit July returns detailed in the search results. However, the overall hedge fund industry, which includes global macro strategies, showed modest gains with hedge funds posting +0.68% in July and a +3.59% year-to-date return[1][4].
The commodities rally was the driving force behind the gains for systematic trend programs, which led the asset classes with a +3.45% July gain and a strong year-to-date performance of +4.73%[1]. More diversified programs saw upside from commodities, particularly long positions in energy markets and coffee[1]. Directional traders found solace in the rallying wheat markets[1].
Discretionary global macro programs typically have tactical flexibility to adjust exposures across asset classes such as fixed income, currencies, equities, and commodities. The broader hedge fund industry commentary emphasized managers adapting exposures in response to policy trends, trade impacts, and market dislocations, suggesting multi-asset, discretionary approaches were capitalizing on dynamic environments[4].
Sector-wise, technology and financial services showed strength in U.S. services and equity markets, with the technology sector leading equity rebounds late July[2][3]. Discretionary global macro funds might have leveraged this trend given their ability to allocate flexibly across sectors.
For mainstream systematic managers, the most common profitable trade was long global fixed income markets, specifically long Eurozone interest rate markets[1]. Coffee was likely the star performer for managers that include softs in their repertoire[1]. A blend of the BarclayHedge Equity Market Neutral Index and Eurekahedge Equity Mkt Neutral Index was introduced[1].
Discretionary global macro programs also had a list of profitable markets similar to systematic managers, with the key being getting the "risk on vs risk off" equation right[1]. Equity indices were either slightly profitable or a mixed bag, and currencies were particularly challenging for most models[1].
Short-term models in July tended to be volatility breakout and short-term momentum systems, and they appeared to benefit most from fixed income markets[1]. The Barclay Crypto Traders Index, BarclayHedge Currency Traders Index, and BTOP FX Traders Index were also mentioned[1]. The sudden reversals and counter-reversals in equities made the stock indices much more difficult[1].
The CBOE Eurekahedge Relative Value Volatility Hedge Fund Index, Eurekahedge-Mizuho Multi-Strategy Index, and Eurekahedge Long Short Equities Hedge Fund Index were also mentioned, but their details are the same as those provided earlier[1].
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[1] Data source: The Sortino Group Ltd. [2] Source: Kettera Strategies [3] Source: Hedge Fund Research Inc. [4] Source: Preqin Ltd.
In the context of July 2025, technology sectorstrength in US services and equity markets could have presented an investing opportunity for discretionary global macro funds, given their flexibility to allocate across sectors. Furthermore, with the positive performance of coffee in the commodities market, both systematic and discretionary funds focusing on that asset could have profitably invested in this market.
