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Global macro ahead in quiet start to the year, says Lyxor

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Hedge funds have experienced a quiet start to the year with the Lyxor Hedge Fund Index flat year to date, and the trends observed in Q4 of last year continuing to prevail in early 2017, according to Lyxor’s latest Weekly Brief.

Event driven led the pack last week and global macro has outperformed since the beginning of January. CTAs meanwhile, continue to lag behind. They have been negatively impacted by the pullback of the US Dollar and the reversal of energy prices.
 
Lyxor writes: “We have upgraded CTAs to Slight Overweight and maintained our strong convictions on fixed income arbitrage and selected event-driven-L/S equity funds. But beyond our views on hedge fund strategies, investors should bear in mind one peculiarity that characterised 2016.
 
“According to publicly available data from eVestment, the strategies that suffered the largest outflows last year were precisely those which outperformed (event-driven). Meanwhile, the only hedge fund strategy that attracted inflows underperformed (CTAs). As a result, investors should value the virtues of being contrarian and take a closer look at funds which underperformed last year before divesting.”

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