Gold and coffee boost September hedge fund returns: Societe Generale

GOLD and coffee helped to deliver trend-following hedge funds a positive result in September, a Societe Generale note showed on Tuesday (Oct 8), thanks to record commodities prices, rising equities and falling interest rates.

Gold has surged almost 30 per cent this year to a record high on Sep 26. The precious metal has been one of the best performing financial assets in 2024 for these kinds of hedge funds which use price and trading volumes data to find and trade market trends, said the SocGen note seen by Reuters.

Robusta coffee futures also reached record highs last month.

Top coffee producer Brazil has suffered a drought which has impacted much of the crop for the 2024-2025 season, pushing up prices.

The mean return for the group of 96 funds tracked by Societe Generale’s prime brokerage trading desk returned roughly 0.7 per cent for September, with the highest return coming in at a positive 7.41 per cent and the lowest at a negative 15.77 per cent said the note.

Over half of the trend funds posted a positive return for the month, the bank research showed.

The Australian dollar, though adding to hedge fund performance in September, has drained the most from trend hedge funds this year, the SocGen note said.

Other losing positions for the year-to-date included the Mexican peso, silver and natural gas, it said. Sterling, though it proved a positive position in September was still a losing position for trend funds in the year so far.

The bank research did not show which pairs were on the other side of the currency crosses, nor what kind of way the commodities trades were structured.

New notable positions that trend followers entered towards the end of September included long positions in Hong Kong’s Hang Seng stock index, sugar, silver, lean hogs, German and Spanish stock indices the Canadian, Australian and New Zealand dollar, said the bank.

A long position is essentially a bet that an asset will rise in value. REUTERS