Kettera Strategies Analysis - August 2019
In the ever-evolving world of finance, the performance trends of various investment strategies have undergone significant changes since the 2008 financial crisis. This article explores how systematic trend following strategies, short-term programs, global macro programs, currency specialists, and equities-based strategies have adapted to the shifting market regimes and evolving investment behaviors.
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Systematic Trend Following Strategies
Systematic trend following strategies have shown improved performance by incorporating both short-term and long-term horizons. Short-term signals provide precision timing in smooth trending markets and help de-risk during choppy, volatile periods, adding convexity and drawdown protection. This blend offers better risk-adjusted returns compared to isolated long-term trend signals [1].
In contrast, the 2008 crisis environment created strong, sustained trends favorable for longer-horizon trend followers but less so for short-term noise-sensitive models.
Short-Term Trend Programs
Short-term trend programs function as a key source of drawdown protection during volatile periods but may produce whipsaws in non-trending markets [1]. This nuanced role is more complex than in 2008 when pronounced long and short trends dominated.
Global Macro Strategies
Global macro strategies have become more adaptive but less dominated by pure trend-following factors. The market environment post-2008, with low interest rates, volatility regimes, and geopolitical tensions, has altered performance drivers. Recent insights suggest these strategies balance trend signals with relative-value approaches to find opportunities outside straightforward trends [5].
Currency Specialists
Currency specialists face challenges from ongoing inflationary pressures and monetary policy divergence globally, contributing to currency volatility and requiring more dynamic positioning than in 2008. Emerging market currencies in particular lag due to inflation risks and fiscal pressures, contrasting with the sharper moves seen during the 2008 crisis [2].
Equities-Based Strategies
Equities-based momentum and trend strategies show mixed results. Momentum strategies with frequent rebalancing are sensitive to transaction costs and slippage, producing drawdowns and slow recoveries, unlike more infrequent rebalancing in trend-following strategies. Recent data highlight divergent momentum performance across major indexes, with some recovery but less dominance than during crisis rebounds like in 2008 [3]. Meanwhile, global equity markets have shown strong growth driven by tech and AI sectors recently, contrasting the sharp equity declines in 2008. Active management and stock picking are favored in this differentiated environment [4].
In summary, compared to 2008’s crisis-period performance — where long-term trend following and momentum often thrived amid strong macro shocks and clear directional moves — the current landscape emphasizes multi-horizon trend signals, risk management through short-term programs, and diversified global macro and currency positioning responsive to more complex, less trending regimes [1][5]. Equities momentum strategies face more frequent drawdowns and require careful cost management, while global equity markets reflect industry and regional growth themes rather than crisis-induced volatility swings [3][4].
This analysis is based on the latest academic and industry reports from 2025, showing that trend-following and related systematic strategies have evolved to adapt to a more nuanced, mixed-regime market environment than the one experienced in 2008.
[1] Academic report on trend following strategies [2] Industry report on currency specialists [3] Research on equities-based momentum strategies [4] Insights on active management and stock picking [5] Analysis on global macro strategies
- To adapt to the complexities and less trending market regimes that arose post-2008, systematic trend following strategies have been revised to incorporate both short-term and long-term horizons, providing added convexity, drawdown protection, and precise timing.
- Global macro strategies, in response to the evolution of the market environment since 2008, have become more adaptive, balancing trend signals with relative-value approaches to discover opportunities outside straightforward trends, rather than being purely trend-following.
