New Year starts with the same story: Dollar and Equities higher – Month in Review: January 2025

February 19, 2025

Macroeconomic Environment Review

The US dollar advanced modestly further in January following the near 8% gain in Q4 last year. The dollar weakened during January as President Trump failed to announce any tariffs during the inauguration. However, the strengthening of the dollar into month-end reflected the fact that the Trump administration was planning to implement a 25% trade tariff on Canada and Mexico and a 10% tariff on China. We expect this initial move to extend and our US dollar forecasts suggest scope for gains through Q1 and into Q2 before some modest reversal by mid-year.

In the US, the S&P 500 Index returned 2.8% in January. The US economy continues to show signs of strength, with 256,000 jobs added in December and healthy GDP growth of 2.3% annualized in the fourth quarter. President Trump’s promise of deregulation and tax cuts further fuelled optimism over the economy. However, the US market’s heavy tech concentration weighed on performance towards the end of the month, as DeepSeek’s ability to produce efficient low-cost AI models hurt Nvidia, which was the largest constituent of the S&P 500 Index.

Monthly Performance Review

During January 2025, AENAON Systematic Strategies generated the following total returns:

Across the spectrum of our benchmark indices, our strategies’ performance during January was rather positive. As a comparison, the US S&P 500 equities index added 2.80%, the Barclay Hedge Fund Index posted a 1.80% advance, the Barclay CTA Index gained 0.56% while the other benchmark indices can be seen on the chart below.

Chart 1: Monthly Performance vs. Benchmark Indices – January 2025

Charts 2, 3 and 4: Inception-to-Date Performance vs. Benchmark Indices

You can always review our updated factsheets at the following Fundpeak links, with monthly performance updates and statistics since inception: