Key Takeaways
- • Trend-following hedge funds posted an average return of -0.1% in June, according to Société Générale analysis reported by Reuters, with gains in precious metals largely offsetting losses elsewhere.
- • The sector remains up more than 9% year-to-date despite heightened market volatility, per Société Générale.
- • Gold prices fell nearly 12% in June, and funds holding short gold positions benefited, while silver also contributed to gains.
- • Many CTAs established new long cocoa positions and increased short wheat exposure after 23 June; cocoa has since risen more than 18% and wheat more than 8%, pressuring those shorts.
- • Interest rate markets remain the most crowded positioning area among trend-following managers, reflecting inflation and central bank tightening concerns.
Summary
Trend-following hedge funds posted only marginal losses in June 2026 as gains from precious metals trading largely offset weaker performance in energy, agricultural commodities and currencies, according to a Reuters report citing new analysis from Société Générale. The French bank said systematic trend-following funds, including commodity trading advisers (CTAs), delivered an average return of -0.1% for the month, leaving the sector up more than 9% year-to-date despite heightened market volatility.
Performance across the 78 hedge funds tracked by Société Générale was mixed during the first half of the year, with returns ranging from gains of around 11% to losses of approximately 8%. Gold and silver were among the strongest contributors to June performance, alongside equity positions. These gains offset losses from trades linked to crude oil, heating oil, coffee and the Australian dollar. Gold prices fell nearly 12% during June, benefiting funds that had established short positions, despite ongoing geopolitical tensions in the Middle East, as expectations of higher interest rates reduced the appeal of non-yielding assets.
Inflation concerns have intensified following disruption to global energy markets stemming from the conflict involving Iran, prompting investors to reassess the outlook for central bank policy and interest rates. Société Générale also highlighted notable shifts in CTA positioning. Since 23 June, many trend-following funds have established new long positions in cocoa while increasing short exposure to wheat futures. Subsequent market moves have produced mixed results: New York cocoa futures have climbed more than 18% since the end of June, supporting the new bullish positions, while wheat prices have risen more than 8%, leaving short positions under pressure.
The report found that interest rate markets remain the most crowded area of positioning among trend-following managers, reflecting investors' focus on inflation, monetary policy and the prospect of further central bank tightening.
Performance across the 78 hedge funds tracked by Société Générale was mixed during the first half of the year, with returns ranging from gains of around 11% to losses of approximately 8%. Gold and silver were among the strongest contributors to June performance, alongside equity positions. These gains offset losses from trades linked to crude oil, heating oil, coffee and the Australian dollar. Gold prices fell nearly 12% during June, benefiting funds that had established short positions, despite ongoing geopolitical tensions in the Middle East, as expectations of higher interest rates reduced the appeal of non-yielding assets.
Inflation concerns have intensified following disruption to global energy markets stemming from the conflict involving Iran, prompting investors to reassess the outlook for central bank policy and interest rates. Société Générale also highlighted notable shifts in CTA positioning. Since 23 June, many trend-following funds have established new long positions in cocoa while increasing short exposure to wheat futures. Subsequent market moves have produced mixed results: New York cocoa futures have climbed more than 18% since the end of June, supporting the new bullish positions, while wheat prices have risen more than 8%, leaving short positions under pressure.
The report found that interest rate markets remain the most crowded area of positioning among trend-following managers, reflecting investors' focus on inflation, monetary policy and the prospect of further central bank tightening.
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