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INNOVATION
The ways in which Amazon’s business model could be employed by financial services and fintech firms to influence, disrupt and reshape the asset management industry are explored in a deep-dive new study by SEI.
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Last year was full of ups and downs, but there were plenty of lessons to be learned for traders. Despite this, how to survive, how to thrive, how to remain competitive and the importance in what to look for when selecting a broker remain a priority, writes Mario Sanchez (pictured), Managing Director and Global Head of FXCM Pro Sales.
CRYPTOCURRENCY
A novel cryptocurrency fund run by digital assets-focused investment manager Wave Financial, which uses a call options strategy to trade on bitcoin’s volatility, has scored a near-146 per cent return in its first year of trading.
The Wave BTC Income & Growth Digital Fund, a pioneering cryptocurrency derivatives-based strategy, aims to capitalise on bitcoin’s high volatility using a covered call approach to generate returns, while also capturing the potential upside of the currency.
The fund – whose investor base comprises a mix of institutions, family offices and high-net worth individuals with experience in both digital assets and traditional financial market –
FUND PERFORMANCE
The world’s 20 biggest hedge fund firms took home around half of all gains made by the entire industry last year, as successful stock-picking and individual manager skill sent returns soaring among the sector’s behemoths, leaving quant-based strategies in their wake.
Overall, the hedge fund industry generated UD127 billion net of fees last year, according to new research by LCH Investments, a fund of hedge funds which is part of the Edmond de Rothschild Group.
Some USD63.5 billion of that total was generated by the top 20 largest hedge fund managers, including the likes of Tiger Global, Millennium Management, and
FUND PERFORMANCE
Managed futures hedge funds have made a positive early start to the year, following a tough 12 months in which volatility spikes and see-saw performances in many assets made it tricky for computer-based strategies to capitalise on market trends.
Two out of the three daily CTA indices produced by Société Générale were in the black entering the final week of January.
The main SocGen CTA Index, which measures the daily performance of a select pool of 20 of the largest managed futures strategies, has advanced 1.43 per cent since the start of 2021.
The gain continues the index’s recent positive
MANAGER INSIGHTS
Founded by a team of Italian former investment bankers, London-based activist hedge fund Bluebell Capital Partners has gained impressive momentum over the past year with its focus on listed, predominantly European large-cap companies.
FUND PERFORMANCE
Brummer Multi-Strategy CEO Mikael Spångberg says the firm is in a “good position” to deliver continued positive performance, after the flagship strategy posted its second-best annual performance to date – but he underlined the importance of generating alpha in the face of unpredictable markets.
FUND FLOWS
Total global hedge fund assets under management have mushroomed to a record USD3.6 trillion, thanks to defensive outperformance and opportunistic gains during 2020’s upheaval – though the biggest firms continue to take the lion’s share of investor capital as smaller names are squeezed.
Investors added around USD16 billion to hedge fund strategies during the second half of last year, after net asset inflows reached USD3 billion in the fourth quarter, new data published by Hedge Fund Research shows.
In a webinar this week, HFR president Kenneth Heinz hailed 2020 as “one of the most impressive years in the history of the industry,
OUTLOOK
The fallout from the coronavirus pandemic is set to unlock global “megatrends” this year, including consumer and corporate technology, healthcare, and sustainability themes – and hedge fund investors can expect a “rich environment for growth”, a major new study by JP Morgan Asset Management suggests.
The firm’s 2021 Global Alternative Outlook also predicts a rebound in equity market fundamentals as economies recover from the Covid crisis, as well as continued momentum in special purpose acquisition vehicles (SPACs), which have seen a surge in activity among several high-profile, brand name hedge funds over the past year.
Hedge fund managers can expect
CRYPTOCURRENCY
As more hedge funds pile into cryptocurrencies, market inefficiencies and price dispersion are bringing fresh arbitrage opportunities for managers.
Bitcoin’s sustained rally over the past year saw the cryptocurrency roar to a record high of more than USD41,000 in early 2021, with many investors increasingly using it as a hedge against falling real yields and inflation risks stemming from central bank quantitative easing.
But as more hedge fund managers join the digital asset arena, running a range of discretionary and quantitative strategies, the potential for alpha generation “will likely moderate” in the coming months and years, said senior Lyxor Asset
