Swiss alternative investment company ALTIN’s portfolio generated positive returns over the first half of 2014 with a return of 3.43 per cent, outperforming the HFRI FoF Composite index which recorded 1.53 per cent for the same period.
The period was characterised by a strong and somewhat renewed appetite for yield, a forceful rotation from growth/momentum-driven stocks to value stocks and by heightened geopolitical risk emanating from Russia, Ukraine and the Middle East.
Overall the first semester of 2014 was positive for most asset classes.
As expected corporate activity was strong, providing a broad range of opportunities for managers within ALTIN’s event driven allocation, which was the best contributing silo for the period.
The equity hedge allocation (market neutral, variable bias and long bias) proved resilient throughout the sector rotation thanks to a good level of diversification in terms of investment styles. On the other hand, discretionary macro funds generated negative returns on average as they were caught wrong-footed with mainly pro-cyclical trades.
However, regarding the macro space the best contributor to ALTIN’s portfolio was a systematic macro fund, while the commodity trading silo contributed strongly to the year-to-date performance despite its relatively small weighting.
The environment remained difficult for managers in the credit and fixed income space as their short spread and long volatility positioning has not paid off so far but will provide very good upside if credit markets finally correct.
