Funds
During the last two weeks of December, hedge funds erased the bulk of the losses recorded earlier in December, when risk aversion was elevated. CTAs were again the best performers, in a remake of the patterns observed throughout the year (+4.7%from 16 December to 30 December). The good news came from Event Driven managers, up +3.1% during the same period. Yet, December was overall a mixed month, the Lyxor Hedge Fund Index being down 0.2% on the back of the underperformance of Fixed Income strategies (-3.1%). Their poor showing was related to the sharp high yield spread widening recorded earlier in the month, when liquidity issues emerged
One of the inherent risks to investing in hedge funds is the inherent volatility of performance. A top fund today might be the worst tomorrow. In Preqin’s latest November Hedge Fund Spotlight report, which looks at this year’s top 100 performing hedge funds, only three funds feature on the list from 2013.
To qualify, only those funds with USD100m or more in AuM were considered. The sample period was October 2013 through September 2014.
What is clear from the list is that the top performing funds over the past 12 months are more volatile. Whereas year-on-year only three funds made
Turnover at the cash markets of Deutsche Börse stood at EUR1.28 trillion (2013: EUR1.16 trillion), in 2014.
Order book turnover on Xetra, Börse Frankfurt and Tradegate stood at EUR108.9 billion in December (December 2013: EUR85.4 billion). Of the EUR108.9 billion, EUR100.7 billion were attributable to Xetra (December 2013: EUR77.2 billion). EUR4.0 billion were attributable to Börse Frankfurt (December 2013: EUR4.2 billion). Order book turnover on Tradegate Exchange totalled approximately EUR4.3 billion in December (December 2013: EUR4.0 billion).
In equities, turnover reached about EUR91.4 billion on Deutsche Börse’s cash markets (Xetra: EUR85.6 billion, Börse Frankfurt: EUR1.9 billion, Tradegate Exchange: EUR3.9 billion).
The international derivatives markets of Eurex Group ended 2014 with a turnover of approximately 2.1 billion contracts (2013: 2.2 billion contracts).
The total volume for 2014 splits into 1.5 billion contracts traded at Eurex Exchange (2013: 1.6 billion) and 607.4 million contracts traded at the International Securities Exchange (ISE) (2013: 638.8 million). This corresponds to a daily average trading volume of 8.3 million contracts, thereof 5.9 million contracts at Eurex Exchange and 2.4 million contracts at ISE.
In 2014 the equity index derivatives segment was the largest at Eurex Exchange with a total annual volume of 708.4 million contracts (2013:
Three of Market Vectors Index Solutions (MVIS) six investable Long/Short Equity Indices, recorded positive performance in December.
Each index is constructed using transparent, liquid ETFs and US Treasury securities to produce hedge fund-style returns without hedge fund pricing, opaqueness and redemption restrictions.
The Market Vectors North America Long/Short Equity Index led the way with a return of 0.36%, followed by Market Vectors Global Long/Short Equity Index (0.10%) and Market Vectors Asia (Developed) Long/Short Equity Index (0.09%).
The Market Vectors Western Europe Long/Short Equity Index recorded the biggest loss with a return of -1.57%, while the Market Vectors Emerging Markets Long/Short
Total hedge funds assets increased 1.8% in November to USD3.070 trillion, according to eVestment’s Hedge Fund Asset Flows report for November 2014.
Performance gains accounted for the majority of the asset increase, however after two months of negative investor sentiment, investors allocated a net USD5.4 billion into hedge funds in November. November’s inflow increased YTD allocations to USD112.2 billion.
Investor interest in hedge funds in 2014 has been stronger than many expected, supported by multi-strategy fund flows and a renewed interest in equity hedge fund exposures. Aggregate flows are much higher than any year since 2007 and core growth rates
Barring an unexpected global or financial event, hedge funds are positioned for another year of solid growth as institutional investors seek to gain alternative exposures to traditional equity and fixed income markets.
That’s according to eVestment which expects asset flows into hedge funds of at least between USD90 billion and USD110 billion in 2015.
eVestment predicts continued flows into equity focused strategies, although those flows will likely be below the 8.6% growth rate (USD78 billion) YTD seen in 2014.
Credit strategies will likely see growth similar to that of2014, which is below its accelerated growth period of 2012-2013; however distressed, a subset of
The Lyxor Hedge Fund Index continued to slide last week as global risk aversion was elevated, according to Philippe Ferreira Head of Research Managed Account Platform Lyxor Asset Management.
Q4 2014 has been particularly difficult, with negative returns in December (-2.4% MTD) in addition to the October drawdown.
Last week, all hedge fund strategies were down, with Fixed Income managers underperforming on the back of liquidity issues on some names. Lyxor’s Fixed Income Broad Index, which aggregates L/S Credit, Fixed Income Arb and Convertibles Arb is down 6.1% in Q4 (up to 16 December). Global Macro and Special Situations managers
Friday, 19 December 2014 was Euronext’s most active day in terms of trading in 2014 and the most active day on its market since March 2011.
Some EUR15.986 billion was traded across all its cash products: equities; ETFs; warrants and certificates; and bonds.
Danielle Ballardie, Head of Cash Markets at Euronext, says: “We are delighted to see our cash markets producing such strong trading figures. This demonstrates the positive impact of the reinvigoration of Euronext's cash business during 2014. We will continue to optimize our business in 2015 and drive real innovation through consultation with members to offer
In the last full trading week of the year, the closing of the books was crudely interrupted by a crossover from chaos in the energy markets, accompanied by a total collapse in the Russian Rouble, says Tim Edwards, Index Investment Strategy, S&P Dow Jones Indices…
The VIX closed on 17 December at 19.4, helped on its way down (from Tuesday’s high of 24) by the measured and patient comments issued yesterday by the US Federal Reserve.
All of our global equity volatility measures are up, but their increases pale in comparison to their equivalents in the oil markets. At
