Hedge funds are positioning for a spike in volatility in healthcare, energy, financials and tech as the US presidential election gathers pace.
Tullow Oil, the London-listed oil and gas explorer shorted by several major hedge funds, has seen a further slump in its share price this week.
Hedge funds are continuing to bet against Europe’s travel industry, with several brand-name managers growing their shorts in travel staples such as easyJet and TUI, amid concerns the fallout from the coronavirus (Covid-19) outbreak could impact the continent’s tourism sector.
Investors’ bias towards momentum risk is making trend-following hedge fund strategies particularly sensitive to investor inflows, amid a recent spike in market volatility.
By Don Steinbrugge, Agecroft Partners – Hedge funds fees remain under extreme pressure across the industry. This strong trend is driven by declining return expectations from investors, increased competition across the industry, and an increasing share of industry assets controlled by large institutional investors.
Productivity provides an edge in equity research, and as equity-focused hedge funds navigate the markets this year, any opportunity to use next generation technology tools to trade more adroitly will likely be welcomed. In the following Q&A with Hedgeweek’s managing editor, James Williams, Nick Mazing, Head of Research at Sentieo Inc, discusses how its platform is using the latest AI technology to improve the research workflow and reduce the time taken to ingest structured and textual data sets, and empower portfolio managers as they look to build alpha-generating investment theses.
Fears over the coronavirus outbreak will drive volatility in global markets for some time, according to BlueBay Asset Management, which suggested re-orientating portfolios away from cyclicals and towards duration and carry.