Strategic Heat Map by Kettera – June 2020 Report
As the market began to recover from the March 2020 COVID-19 crash, volatility persisted, but risk assets (equities) experienced a strong rebound. Central bank stimulus and fiscal support drove liquidity and selective rallies, creating a complex environment for various investment strategies.
General Performance Trends by Investment Style (June 2020)
Discretionary Macro Managers
Many discretionary macro managers faced challenges due to rapid shifts in macro themes after the initial COVID crash. Those who positioned into stimulus beneficiaries, such as US tech, healthcare, and commodities like gold, generally saw gains. However, managers who stayed short on risk assets or energy markets likely encountered losses as equities rebounded sharply. The quick turnaround and high volatility required nimble positioning, and discretionary managers with strong fundamental views on reopening trades (e.g., industrial cyclical rebounds) did well.
Systematic Trend Following Programs
Trend followers typically performed well given clear directional moves—initial crash sell-offs and subsequent rebounds created strong trending environments. Commodities (especially gold and silver), equity indices during rebound phases, and long USD trends were generally rewarding. Short-term whipsaws and choppy rallies mid-June made some shorter time frame trend systems less effective. Overall, trend followers benefited from large directional moves in both directions during this volatile period.
Short-Term Traders
Short-term traders saw mixed results; volatility provided ample trading opportunities, but rapid, unpredictable swings increased risk. Highly liquid large-cap tech stocks, forex pairs with high volume, and some energy futures if timing was right were profitable. However, some smaller sectors or illiquid issues where spreads widened, and sudden news-driven moves could cause losses. Skill in execution and fast reaction to news were crucial.
Equity Long-Short Managers
Equity long-short managers generally benefited from market dispersion—long cyclical recovery names and short pandemic-losers. Long positions in selected tech, consumer discretionary, and industrials, and shorts on energy and companies heavily affected by lockdowns were profitable. Managers with significant exposure to beaten-down sectors early in June sometimes faced short-term volatility and squeeze effects. Stock selection and sector rotation were key to capturing the reopening rebound while hedging risks.
Summary Table
| Investment Style | June 2020 Trend | Most Profitable Sectors/Markets | Most Challenging Sectors/Markets | |---------------------------|-------------------------------|--------------------------------------|------------------------------------| | Discretionary Macro | Recovery positioning, mixed | US tech, healthcare, gold, industrials | Energy, shorts on equities post-rebound | | Systematic Trend Following | Benefited from strong trends | Commodities (gold, silver), equity indices | Short-term choppiness mid-month | | Short-Term Traders | Volatility-driven, mixed | Large-cap tech stocks, liquid FX | Illiquid sectors, sudden news moves | | Equity Long-Short | Benefited from dispersion | Long tech, consumer discretionary | Energy, lockdown-hit sectors short-term volatility |
For more specific and official data on Kettera Strategies’ performance per style and sector for June 2020, we recommend checking their investor reports, monthly letters, or reaching out directly to their investor relations team. These sources would give the most accurate, style-by-style attribution analysis.
This article does not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group.
In the context of the market recovering from the March 2020 COVID-19 crash, discretionary macro managers who positioned into stimulus beneficiaries like US tech, healthcare, and commodities such as gold often saw gains, while those who stayed short on risk assets or energy markets may have encountered losses. Systematic trend following programs generally performed well due to clear directional moves, with commodities, equity indices, and long USD trends being rewarding. However, short-term whipsaws and choppy rallies in mid-June made some shorter time frame trend systems less effective.
