Natural gas futures slump leads to Citadel's annual return hitting the lowest level in 6 years

The bearishness in the energy futures market is directly impacting the performance of fund managers. Global hedge fund Citadel posted an annual return of 9.3% this year, marking its worst performance since 2018.

The Impact of Natural Gas Futures Trading

The main reason for the poor performance is significant losses in derivatives trading related to natural gas. As trading volume in the energy sector rapidly contracted, it negatively affected the overall portfolio performance. However, profits from equities and bonds partially offset these losses.

Unprecedented Performance in History

This performance also indicates a difficult year for Citadel. It is only the sixth time since 1990 that the annual return has fallen below 10%, and this year is the lowest among those cases. This demonstrates how much volatility in the energy market can influence performance.

Future Strategy

Citadel plans to focus on strengthening its capabilities in commodities management moving forward. This suggests an intention to rebuild expertise in energy trading, including natural gas futures, to better respond to market changes.