Hedgeweek Comment: Vanilla - with a little chocolate
In the midst of determining what is the right strategy to implement during these troubled times, hedge fund managers are opting for plain vanilla strategies - but with a sprinkling of chocolate.
Traditional investment options such as long/short equity are again a favourite among fund managers who over the years have tried their hand, and sometimes succeeded, at more complex investment strategies.
But now it's time to stick to tried and tested methods. According to a survey of asset managers, institutions, and high net worth investors at the Gaim Fund of Funds conference in Geneva, hedge funds using technical indicators or a combination of technical and fundamental indicators to make short or medium-term bets on market movements are likely to fare best in the next two years.
Long/short equity strategies were chosen by 16.7 per cent, while a third of respondents expressed a preference for funds that combine trading, arbitrage and long/short equities strategies.
This year different strategies have enjoyed wildly different fortunes. Greenwich Alternative Investments says that convertible arbitrage strategies suffered a 20 per cent average decline in October and a year-to-date drop of 35.2 per cent. Short-biased funds may have been hampered by temporary short-selling restrictions during part of September and October, but they gained 11 per cent in October and are up 25.6 per cent so far this year.
All this might be turned on its head in 2009, of course. Let's see what the New Year brings in - but in the meantime, simpler investment models seems to be back in favour.
- Special Reports
- By Location
- Asian Hedge Funds
- BVI Hedge Fund Services
- Bermuda Hedge Fund Services
- Canada Hedge Fund Services
- Cayman Hedge Fund Services
- Channel Islands Stock Exchange
- Future of offshore funds
- Gibraltar Hedge Fund Services
- Guernsey Hedge Fund Services
- Hedge Funds in Germany
- Hong Kong Hedge Fund Services
- Ireland Hedge Fund Services
- Isle of Man Hedge Fund Services
- Jersey Hedge Fund Services
- Jersey Private Equity Services
- Latin American Hedge Funds
- London Hedge Fund Services
- Luxembourg Hedge Fund Services
- Luxembourg Private Equity Services
- Malta Hedge Fund Services
- Middle East Hedge Fund Services
- Singapore Hedge Fund Services
- South African Hedge Fund Services
- Spanish Hedge Funds 2008
- Switzerland Hedge Funds
- US East Coast Hedge Fund Services
- US Hedge Fund Services
- By Subject
Latest Special Report
- By Location