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Alternative Market Briefing

Hedge funds show resilience amid political and geopolitical stress

Thursday, April 20, 2017

Komfie Manalo, Opalesque Asia:

Hedge funds proved resilient with most strategies being positive in the first half of April this year amid political and geopolitical uncertainties, Lyxor Asset Management said in its latest Weekly Briefing.

The Lyxor hedge Fund Index was flat in the week covering 04 to 11 April with a majority of strategies in positive territories. CTA and merger funds were the exceptions, in opposite directions: CTAs were the downside exception, dragged by their long in equities and shorts in energy. Merger and arbitrage funds, on the upside, were boosted by the end of the legal battle over the Abbott acquisition of Alere, and by the bidding war over the generic drugs producer Stada.

Lyxor AM Senior Strategist Jean-Baptiste Berthon, commented, "Funds at Lyxor did not meaningfully alter their positions this week. CTAs remain long equities, Macro funds keep limited and relative exposures, L/S equity US funds are more exposed than their European peers, who added safeguards."

Political and geopolitics add stress

Berthon added that the accumulation of (geo)political risks sent markets on the haven side. Ten days before the first French election round, the outcome remains ever more uncertain. The advance in polls of the two lead contenders is eroding. Meanwhile, the resilience of the center-right and the breakthrough of the far-left candidate suggest a speculative four-players-game.

In A......................

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