Sun, Aug 30, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Hedge funds lever up - Bank of America Merrill Lynch

Tuesday, October 09, 2012

Bailey McCann, Opalesque New York: Hedge funds have reversed a nine month trend, increasing leverage 5.4% year-on-year (YOY) according to new research from Bank of America Merrill Lynch Global Research. According to Mary Ann Bartels, lead hedge fund analyst at BofAML, leverage is up $286.6bn in August, after nine consecutive months of negative YOY growth since last November. The moves are a potential signal that investors expect equity markets will continue to trend to the upside in the near term.

Despite positive investor sentiments, report data shows that Q4 is likely to show overall underperformance from hedge funds despite a strong third quarter. "Since 1995, hedge funds outperformed the S&P 500 index by an average of 207bps in 3Q, and underperformed by 312bps in 4Q," Bartels writes. Historical data trends show that hedge funds tend to outperform in down markets and underperform when markets start to go up. The only time hedge funds were prepared for a year-end rally was the year 2000, when they posted strong numbers even as markets went higher.

The global diversified hedge fund index was up approximately 1.91% in 3Q’12 and up 3.31% year to date, still underperforming the S&P 500. In terms of individual strategies, Convertible Arbitrage was the best performer YTD and up 5.82%; Market Neutral performed the worst and was down 5.46%. Market Neutral and Equity Long/Short have both increased their market exposures to 1% net short and 19% net long respectively. Mac......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Hedge funds suddenly find real money is back in Argentina's debt, Elon Musk buys more SolarCity stock following hedge fund manager short, BlackRock plans to get into rental-home financing[more]

    Hedge funds suddenly find real money is back in Argentina's debt From Bloomberg.com: The real money is back in Argentina. Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorit

  2. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  3. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  4. Opalesque Exclusive: Credit-focused hedge fund Numen Capital expects more volatility in Europe in coming months[more]

    Benedicte Gravrand, Opalesque Geneva: A London-based hedge fund, which has just hired two emerging managers, is cautious on Europe. Vassilis Paschopoulos and former Lehman’s colleague Nikos Kargadouris, launched a London-based credit-focused hedge fund called

  5. Performance - Hedge funds bruised by stocks’ meltdown, Capstone’s volatility hedge fund is having a monster month thanks to market mayhem[more]

    Hedge funds bruised by stocks’ meltdown From WSJ.com: Hedge-fund managers like to promise their investors protection from market swings. In the recent stock swoon, many were caught off guard. Billionaire managers such as Leon Cooperman, Raymond Dalio and Daniel Loeb are deeply in the red

 

banner