Systematic hedge funds outperformed wider industry
Those taking the most risk made the most money
Long cocoa positions help lift returns investors

LONDON, March 25 Reuters Record cocoa prices and markets whipped around by inflation and geopolitics helped hedge funds using systematic strategies outperform their peers in the first quarter, according to industry players and investors.

A systematic hedge fund manager uses coding and algorithms to determine whether to find trades strong enough to become market trends, unlike traditional managers who decide the trade themselves.

These trend funds made an average gain of almost 9 in the first two months of 2024, versus the wider hedge fund industry39;s 2.6 gain, according to Barclays39; prime brokerage, which tracked the performances of 40 classic trend hedge funds.

Their success reflected how volatile markets had become and how market fortunes are differing globally, the sources said.

The U.S. SP 500 has risen over 11 so far this year, but Hong Kong39;s Hang Seng is down about 2. Japan39;s Nikkei has rallied over 20 and European stocks lagged with 6 gains, with China up around 3.

Commodity markets have also been mixed, but the consistency of cocoa39;s sustained rally to record highs has been a bonus for systematic hedge funds.

Diverse performances across regions and assets are good for these funds which benefit from disparate markets, said Michael Oliver Weinberg, a professor at Columbia Business School and a hedge…