3/25/2024

Cocoa rally boosts hedge funds

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ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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Key points:

  • Trend-focused hedge funds posted an average return of 9%.
  • The top 10 trend funds with high volatility showed a return of 20% over two months.
  • Long cocoa positions taken in the first half of 2023 have generated significant profits.

Record cocoa prices, inflation and geopolitical turmoil in the markets ensured the success of hedge funds in the first quarter of this year. This opinion is shared by both market participants themselves and traders.

Hedge fund successes

Trend-focused hedge funds have delivered impressive performance in the first two months of 2024, outperforming the broader fund market. The average return of these funds was almost 9%, while the growth of hedge funds as a whole was limited to 2.6%.

Sources note that the success of trend funds is due to increased market volatility and the changing global economic environment. By comparison, the U.S. S&P 500 (.SPX) rose more than 11% over the same period, Hong Kong’s Hang Seng (.HSI) fell about 2% and Japan’s Nikkei (.N225) posted gains of more than 20%.

Cocoa continues to rise in price

The top 10 trend funds, whose volatility levels are nearly two-thirds higher than other hedge funds, averaged returns of about 20% in the first two months of this year. Funds with lower risk thresholds showed an average return of 5%.

It’s worth noting that even hedge funds focused on less volatile markets were able to benefit from wild swings in agricultural commodity prices, currencies and energy prices. For example, long cocoa positions taken in the first half of 2023 generated significant profits.

Over the past year, cocoa prices have more than doubled. This is due to crop failures in Ivory Coast and Ghana, as well as a shortage of cocoa beans faced by chocolate producers.

One hedge fund that has successfully capitalized on these trends is Aspect Capital, with $8.6 billion in assets under management. The fund returned 12% in the year to March 19. He made profits through transactions in cocoa, the Chilean peso, the yen, stock markets and European emissions.

“What makes this macro environment so lucrative [for hedge funds] is the existence of multiple sources of instability that contribute to trends – be it the effects of El Niño, the normalization of interest rates or increased geopolitical risks,”

– said Razwan Remsing, Director of Investment Solutions at Aspect Capital.

ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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