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CTAs outperformed last week, says Lyxor

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CTAs outperformed last week on the back of supportive risk appetite conditions, according to Lyxor’s latest Hedge Fund Weekly Brief.

Global macro funds also delivered positive returns as the USD regained its upward trend.
On a negative note, L/S equity funds underperformed as both variable biased and market neutral funds ended the week in negative territory. From a geographical perspective, European and EM funds outperformed US managers.
Event-driven extended its winning streak as merger arbitrage continued to deliver solid returns. Event-driven managers have recently increased their exposure to Europe. However, instead of betting directly on the European recovery like L/S equity managers, they looked at price opportunities related to political uncertainties.
Lyxor writes: “The momentum in the European economy should benefit managers with exposure to the region. The Citi Surprise Index suggests economic releases in the Euro area outpaced expectations. In particular, German economic growth accelerated to the fastest pace in a year in Q1, boosted by a surge in investment.
“After a difficult year in 2016, investors’ appetite for European equities is back. Since the beginning of the year, investors poured more than EUR 10 billion in European equity ETFs despite heightened political uncertainties. This is in stark contrast with flows into U.S. equities, which gathered only EUR4 billion. Such inflows highlight the fact that fundamentals are strong in Europe.”

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