The impact of the coronavirus outbreak is revealing underlying weaknesses in emerging market debt, according to Man GLG.

The rapid stock market sell-off – which saw the S&P 500 slide 3 per cent again on Thursday, with the FTSE 100 down 3.5 per cent on Friday morning – is unlikely to end the long equity bull market run, according to Target QR Strategies, the US hedge fund investment adviser.

Trend-following hedge fund strategies’ strong start to 2020 was eroded during last month’s market volatility, leaving CTAs down for February and flat year-to-date.

Absolute Return Partners recommends keeping a lid on equity beta positions as US stocks look set to mean-revert following their long bear run – with shipping and uranium being two investment themes arising out of the move. 

By Don Steinbrugge, Agecroft Partners – Equity markets around the world sold off last week because of uncertainty relative the Coronavirus’ impact on the global economy and corporate profits. No one knows how bad the economic impact might be, but the worst case scenario or potential “tail risk” is truly frightening relative to loss of life, contraction in global GDP and implosion in the financial markets. 

With global markets in freefall on the back of coronavirus fears, BlueBay Asset Management recommends curbing risk levels for now - but suggests alpha opportunities will arise from this week’s market mayhem.

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.