Macro hedge funds lead the pack in May – but Lyxor urges caution on oil rally

oil wells

Global macro managers have outflanked the rest of the hedge fund pack in recent weeks, with discretionary funds and emerging markets-focused strategies building momentum as markets recovered and oil prices rebounded, new analysis by Lyxor Asset Management shows.

Global macro strategies rose 2.4 per cent last month, as discretionary funds and managers trading emerging market strategies seized on the recent trend reversals across risk assets during Q2, Lyxor’s cross-asset research team said.

By maintaining or increasing risk in portfolios during March’s historic sell-off, EM and discretionary macro funds were able to outperform their systematic counterparts, said the note, which was compiled by senior strategists Philippe Ferreira and Jean-Baptiste Berthon, and hedge fund analyst Pierre Carreyn.

Global macro managers were also the main beneficiaries from the recent upsurge in oil prices, which had positive reverberations across high-yield credit, EM sovereigns, and EM FX assets.

The rebound also gathered pace in the second half of May, despite renewed tensions between the US and China which may sour the global recovery.

However, the Paris-based investment manager is staying neutral on the global macro outlook for now.

“We fear the oil-induced rally might be short lived due to disruptions in global transportation lasting longer than expected,” the strategies warned.

The data comes as well-known macro manager Alan Howard, who leads long-running hedge fund firm Brevan Howard, has reportedly seen his own personal macro-focused AH Master Fund advance a remarkable 100 per cent so far in 2020.