Gold and Coffee Drive September Hedge Fund Returns, According to Societe Generale

By Nell Mackenzie

LONDON (Reuters) – In September, trend-following hedge funds experienced positive outcomes, driven by record commodity prices, rising stock values, and declining interest rates, according to a report from Societe Generale.

Gold prices soared nearly 30% this year, reaching a record high on September 26. The precious metal has emerged as one of the top-performing financial assets in 2024, benefiting those hedge funds that utilize price and trading volume data to capitalize on market trends. Additionally, Robusta coffee futures also reached historic highs last month due to a drought in Brazil, the largest coffee producer, which has severely affected crop yields for the 2024-2025 season, pushing prices upward.

The average return for the 96 funds monitored by Societe Generale’s prime brokerage was approximately 0.7% for September, with the best-performing fund posting a gain of 7.41%, while the worst recorded a loss of 15.77%. More than half of the trend-following funds achieved positive returns during the month.

Although the Australian dollar contributed to hedge fund performance in September, it has been the largest detractor for these funds year-to-date. Other weaker positions this year included the Mexican peso and silver, while the British pound posted a positive return for September but remains a losing position for the year.

The report did not specify which currency pairs were involved in the transactions or how the commodity trades were structured.

Towards the end of September, trend-following funds notably opened long positions in various assets, including Hong Kong’s stock index, sugar, silver, lean hogs, as well as indices from Germany and Spain, and the Canadian, Australian, and New Zealand dollars. A long position indicates a bet that the asset will increase in value.