Funds
The recent underperformance of momentum stocks suggests the prevailing trends of recent years are drawing to a close – potentially making alpha generation increasingly challenging for hedge funds, according to Man Group analysts.
After more than two years of strong performance, momentum names – trades which capitalise on existing market trends, either upward or downward – suffered a sharp reversal towards the end of 2019.
Analysts at Man Group, the publicly-listed London-based global hedge fund group which runs a range of quantitative, discretionary and fund of funds strategies, noted a drop-off in shorting activity, potentially reflecting a “difficult environment” for
– Uncertainty still looms for commodities-focused strategies as Middle East tensions resurface –
The deadly missile strike against Iranian general Qassem Suleimani at Baghdad Airport on 3 January elevated oil prices amid immediate concerns over renewed conflict in the region. Brent Crude surged to more than USD70 a barrel following the attack, and prices stayed above USD68 early last week, before falling back to just under USD65 on Monday.
But while there may be potential for further episodic bouts of volatility further down the line, commodity-focused hedge fund managers believe that for now, the recent surge has likely hit its
Counterparties using the triReduce CLS FX compression service have eliminated USD9.1 trillion of gross notional value from their FX forward portfolios in 2019. A new record for the service, this equates to an annual increase of 71 per cent.
In Q4 alone, the service compressed USD4.9 trillion of gross notional value, 153 per cent above the previous quarterly high achieved in Q3 2018. The new record was driven by increased participation from the prime broker and executing broker community, larger trade populations being submitted for compression and increased year-end activity as market participants manage their risk exposure and capital charges.
Hedge fund managers were up 1.52 per cent in December, pushing their year-to-date return to 8.58 per cent. The official announcement of the completion of the US-China phase-one deal provided support to risk assets, pushing the global equity market higher during the month. The MSCI ACWI (Local) was up 23.44 per cent in 2019.
On an asset-weighted basis, hedge funds were up 1.53 per cent in December, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index was up 6.90 per cent throughout the year.
The Eurekahedge North American Hedge Fund Index edged 1.65 per cent higher during the
Picton Mahoney Asset Management (Picton Mahoney), has completed its previously announced acquisition of the investment fund management contracts of four hedge funds and alternative mutual funds from Vertex One Asset Management Inc. The acquisition increases Picton Mahoney’s total assets under management by CAD400 million.
“Risk Arbitrage strategies focus on reducing risk, lower volatility, and tax efficiency. The goal of this strategy is to offer consistent, positive returns during all market environments,” notes David Picton, President and CEO of Picton Mahoney Asset Management. “Given that many Canadian investor portfolios typically consist primarily of stocks and bonds, we believe that these risk-arb strategies offer
INTL FCStone’s London-based subsidiary, INTL FCStone Ltd, has executed a sale and purchase agreement to acquire GIROXX in Frankfurt, Germany. Closing is conditional upon BaFin approval.Through its digital platform, GIROXX provides online payment and foreign exchange hedging services to small and medium sized enterprises (SME’s) in Germany, Austria and Switzerland. INTL FCStone offers a wide range of financial services including advisory and execution services in commodities, which will be offered to GIROXX’s corporate client base. This purchase completes a series of acquisitions and company restructuring to ensure that all clients of INTL FCStone Ltd are secure with their continuity of
– Timing and discipline “key” to returns in 2020, says BlueBay –
Macro-focused hedge funds have enjoyed a resurgence in recent months, generating a 6.50 per cent annual gain in 2019, aided by a 1.73 per cent return during the final quarter of the year, according to eVestment’s aggregated hedge fund performance data.
As the digital currency market matures, a new crypto hedge fund, Circle Fund, has emerged — the first to be compliant in Asia. The company behind Circle Fund has more than five years of experience in both the primary and secondary blockchain industry markets and has a team of investors with decades of experience in securities, commodity, and currency trading. The global team has a presence in Shanghai, Hong Kong, and New York.
Circle Fund’s team of investors works with parties in the Chinese and American markets, such as high-volume exchanges, media companies, and blockchain and venture capital investment managers. Circle
The global hedge fund industry returned +1.75 per cent in December, bringing aggregate 2019 full-year returns to +9.74 per cent, according to eVestment’s December 2019 hedge fund performance data. 2019 marked the industry’s best aggregate returns since 2013, when the industry returned +12.58 per cent.
For the year, Russia-, China- and Brazil-focused funds were performance leaders by a wide margin. Russia-focused funds returned +26.69 per cent for 2019, China-focused funds returned +23.15 per cent last year and Brazil-focused funds closed out 2019 at +21.68 per cent. However, where there is great reward, there can be great risk: All three of
The Wilshire Liquid Alternative Index, which provides a representative baseline for how the broad liquid alternative investment category performs, returned 0.66 oper cent in December, underperforming the 1.22 per cent monthly return of the HFRX Global Hedge Fund Index. The Wilshire Liquid Alternative Index family is a joint offering between Wilshire Funds Management, the global investment management business unit of Wilshire Associates, and Wilshire Analytics, creator of the Wilshire 5000 Total Market Index.
“Equities surged in the fourth quarter of 2019 across geographies thanks to improvements in investor sentiment and continued central bank support,” says Jason Schwarz, President of Wilshire
