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Komfie Manalo, Opalesque Asia:

The winning streak for hedge funds continued last week with all strategies, besides CTAs, benefitting from the stabilization of market conditions. The Lyxor Hedge Fund Index was up 0.5% as of end July 19, bringing the month to date performance to a solid 1.6% (-2.0% YTD).

In its Weekly Briefing, Lyxor Asset Management said that global macro managers outperformed during the week, on the back of long positions on the U.S. dollar. Buoyant economic data in the U.S. has fuelled expectations that the Fed could start to reverse its very dovish stance at the July 26-27th FOMC meeting.

On a month to date basis, event driven strategies are ahead being up 1.9% (+0.2% YTD), as higher risk appetite translated into a 3.3% return for special situations managers so far in July. Both L/S equity long bias and special situations managers are up 3.3% month to date (as of July 19th). Cautious hedge fund managers have swiftly adjusted upwards their equity beta in July. But the most defensive managers lagged as the Brexit shock was offset by solid economic data releases. Preliminary PMIs in the euro area in July actually suggest that economic activity continued to be solid post-Brexit vote.

CTAs down for two straight weeks

On a negative note, CTAs are down for the second week in a row, due to the rise in sovereign bond yields. The June market selloff has led CTAs to build up significant long p......................

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