In the current climate, investors are looking for more defensive hedge fund strategies, capable of providing a predictable risk/return profile.
Hedge fund strategies of all stripes have posted sizeable losses so far this month as fears over the coronavirus outbreak ripped through global markets, new data from Hedge Fund Research shows.
Portfolios built around value-based positions may be primed for a “significant” rally following the sustained global stock market slide, according to strategists at Man Group.
The UK’s Financial Conduct Authority last night (23 March) ruled out a ban on short selling, as many major hedge fund firms continue to weigh in with bearish bets to capitalise on the recent global market turmoil.
Algebris Investments, Davide Serra’s multi-asset class hedge fund firm, says markets are “ripe with opportunities”, and is now preparing to deploy its “dry powder” liquidity in a range of asset classes it sees as benefiting from future fiscal stimulus and persistent low interest rates.
Rhenman & Partners Asset Management, the Stockholm-based hedge fund firm which invests in global healthcare stocks, says the industry has not been shielded from the impact of Covid-19 - though different sub-sectors have been impacted in markedly different ways.
The market fallout from the coronavirus pandemic will see continued volatility across equity, credit and commodity markets – but also potential investment opportunities.
A stronger revalued yuan is vital to any post-coronavirus global economic recovery, with reinvigorated Chinese financial firepower helping to swerve a deep recession in the next year, according to Toscafund Asset Management’s Savvas Savouri.
Recent spikes in Korean stock market volatility following the global sell-off could see an upswing in margin calls in its autocallables market, potentially driving the index even lower, with investors taking advantage of the higher volatility to obtain higher yields.
Oil prices plummeted on Monday morning as the impact from the coronavirus outbreak – coupled with a Saudi Arabian price cut – dragged global stock markets lower, with a number of major hedge funds standing to gain from the commodities crash.