The hedge fund industry is expected to post modest losses in November, which is welcome news after two of the lowest months of performance on record, says Credit Suisse.
The hedge fund industry is expected to post modest losses in November, which is welcome news after two of the lowest months of performance on record, says Credit Suisse.
Early estimates also indicate the Credit Suisse/Tremont Hedge Fund Index will finish down approximately 0.71 per cent in November.
Credit Suisse says continuing downward trends in US Treasury yields, commodity and currency markets led to positive performance for the global macro and managed futures sectors and helped mitigate the losses from other sectors.
Managed futures was the best performing sector in the broad index, finishing the month up an estimated 3.21 per cent.
In addition, three other sectors appear to be ending the month in positive territory, including dedicated short bias, equity market neutral and global macro.
Credit Suisse reports that the continued commodities bear market benefited the global macro and managed futures sectors as short positions in the commodities sector led to gains for the month.
Oil prices dropped below USD50 a barrel from October highs, and were down almost USD100 a barrel from previous levels this summer.
Yields on ten year treasury bonds dropped to record lows, falling below three per cent in November.
Some analysts currently forecast a further decline in yields if the US Federal Reserve lowers interest rates in December as expected.
Credit Suisse believes that if Federal Reserve efforts to improve market conditions by providing liquidity for asset-backed securities through the term asset-backed securities loan facility are successful, a possible investment shift from treasuries to other securities could begin to create opportunities in the relative value sectors as well.
