If you're looking for the hottest investment trends in 2024, look no further than gold and coffee. According to a recent note from Societe Generale, trend-following hedge funds have seen a positive result in September, thanks to record commodities prices, rising equities, and falling interest rates.
Gold has been on a tear this year, surging almost 30% to a record high on Sept. 26. This precious metal has been a top performer for hedge funds that use price and trading volumes data to identify and capitalize on market trends.
But it's not just gold that's shining bright. Robusta coffee futures also hit record highs last month, driven by a drought in top producer Brazil that has impacted the crop for the 2024-2025 season.
Overall, the mean return for the group of 96 funds tracked by Societe Generale's prime brokerage trading desk was approximately 0.7% for September. While the highest return clocked in at a positive 7.41%, the lowest was a negative 15.77%.
While the Australian dollar contributed positively to hedge fund performance in September, it has been a drag on returns throughout the year. Other losing positions for the year-to-date included the Mexican peso and silver.
Looking ahead, trend followers are entering new positions in assets like Hong Kong's stock index, sugar, silver, lean hogs, and various currencies. A long position essentially bets on an asset's value rising.
Overall, trend-following hedge funds are navigating a volatile market landscape with a mix of winners and losers. Understanding these trends can help investors make informed decisions about their portfolios and financial goals.