Investors are slashing their exposure to hedge fund products at the “worst possible time”, says Man Group’s Pierre-Henri Flamand, amid signs that the long bull market run is starting to run out of steam – throwing up new opportunities for actively-managed strategies.
The surge in appetite for ESG-themed trades could be leading investors to ignore investment fundamentals – potentially fuelling a ‘90s-style tech bubble, RWC Partners has warned.
Short-selling strategies of all stripes seem set to soar amid the ongoing market mayhem which has seen global equities take a pounding following renewed coronavirus fears.
Equity markets have merely sneezed in response to the coronavirus (Covid-19) and while there is uncertainty over how much fear has been priced in, as infection numbers continue to rise, hedge funds have navigated developments with discipline and a modest reduction in net long exposure. For now, rather than trying to react to short-term moves, managers are taking a prosaic stance.
US assets continue to draw international flows, predominantly from Japan, but the level of support may not be sustainable to keep the dollar strong, according to new research by contrarian hedge fund Horseman Capital.
Investors’ bias towards momentum risk is making trend-following hedge fund strategies particularly sensitive to investor inflows, amid a recent spike in market volatility.
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.
Convertible bond arbitrage strategies may hold half of the reported short positions in Tesla, as short bets against the electric carmaker remain resilient despite its market value roaring past USD150 billion this week.
Hedge funds are continuing to offload exposures that face a potential hit from the effects of the coronavirus, as Lyxor Asset Management forecasts a “transitory economic impact” from the deadly outbreak.
The European Energy Exchange (EEX) will extend its global power product suite by offering Trade Registration services for the Japanese Power Derivatives market.