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​​​​​​​An overwhelming majority of macro hedge funds and trend-following managers are upbeat on their performance prospects for the rest of the year – but confidence among equity-focused firms has plummeted following 2022’s stock market upheaval.
Following a challenging second quarter, the hedge fund industry came back fighting in July, advancing 2.89% for the month, according to the Barclay Hedge Fund Index, with much of the uplift coming on the back of a seemingly improbable surge in global equity markets.Â
Performance dispersion among hedge funds has narrowed in recent weeks, as almost 60% of managers generated profits in July – with long/short equity, event driven and relative value strategies all making gains, according to new industry data.
INSIGHT
Hedge funds’ capital-raising activities in Europe could be hindered by new rules impacting the pre-marketing process under changes to the EU’s Alternative Investment Fund Managers Directive, industry practitioners warn.
Volatility drives innovation and the current market conditions are creating both risk and opportunity for investors. The next bull market in risk assets should see digital assets outperform, but meanwhile, drawdowns in assets globally have also given investors space to lay strong foundations for a sound investment strategy in this area.
INSIGHT
Listed interest rate derivatives and commodities futures and options have been identified as the best performing asset classes for proprietary trading firms in the first half of 2022 as fears of a recession and soaring inflation caused volatility across global markets, according to the latest Acuiti Proprietary Trading Managers’ Insight Report.
INSIGHT
Despite a broader industry trend that saw hedge fund redemptions accelerate slightly in May to -$27.53 billion (-0.54% of industry assets), some hedge fund subsectors did manage to add to assets over the month, according to the latest Barclay Fund Flow Indicator published by BarclayHedge.
PARTNER FEATURE
Turbulent markets produce volatility and uncertainty; they also create investment opportunity. But, in order to take full advantage of these prospects, managers and investors must rise above the noise and identify signals to support their investment decisions and help generate outperformance.
INSIGHT
As hedge funds’ compliance teams get to grips with a byzantine array of plans from market authorities on both sides of the Atlantic, wider economic and political developments are continuing to recalibrate the investment and regulatory environment.
INSIGHT
Regulatory change in Europe is gathering pace following the pandemic, and as ESMA’s plans for enhancing AIFMD and MiFID remain on managers’ radars, the post-Brexit FCA implementation of the new IFPR may bring added headaches.
