Tue, Jul 29, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund managers increase risk exposures during September after giving back July gains in August - Man hedge fund report

Tuesday, October 12, 2010
Opalesque Industry Update - Hedge fund managers increased their appetite for risk in September following signals that the Federal Reserve will vote to take additional quantitative easing measures when they meet in November, according to Man, one of the world's largest listed hedge fund providers. The move into risky assets such as emerging market equities, FX and commodities led to a positive month’s performance for most hedge funds.

Managers’ moves to increase risk in September were typical of a volatile 2010. After giving back much of July’s gains in August, equity markets rallied again in September as bearish economic indicators gave way to renewed optimism that looser monetary policy will drive prices higher. It was far from a smooth ride though – with significant intra-month reversals creating challenging trading conditions.

Michelle McCloskey, Head of Research at Man’s multi manager business, said: “Risk appetite returned to the markets with a vengeance this month. Hedge funds, on the whole, put up strong numbers and we continue to believe that hedge funds will deliver a consistent long-run return pattern.”

Global macro and managed futures funds performed well, benefiting from strong moves in FX, gold, industrial metals and emerging markets equity ex-Japan. Managers profited in particular from short dollar and long commodity-linked currency positions. Event driven and relative value made flatter contributions this month. Long/short equity strategies contributed strongly to performance but did not fully participate in the market’s rally.

Other key conclusions from Man’s monthly research include:

Long/ short equity returns were marked by significant dispersion with the strongest moves to the upside generated in the Emerging Markets/Asia. Managers focused in Japan saw subdued trading following intervention in the currency markets from the Bank of Japan. Man continues to believe that the markets favor more tactical traders who can quickly adjust net and gross exposures as conditions require;

Managed futures performed well given the significant momentum across most futures markets particularly in FX and industrial metals. September was marked by sharp reversals which led to more mixed returns from short-term traders.

Ms McCloskey added: “September was the second consecutive month of solid returns from managed futures managers as momentum strategies exploited trending across futures markets. Macro managers also performed well. We continue to look to the FOMC meeting on November 3 for further quantitative easing from the Fed. Government intervention can significantly distort prices and lead to trading opportunities as well as risks. In this environment we continue to favor a balanced approach to hedge fund strategies with a focus on nimble, tactical traders.”

(Man Investments’ monthly report on the hedge fund industry)


www.maninvestments.com

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. Hedge fund manager Winton Capital making headway with long-only strategy[more]

    From PIonline.com: North American investors are helping Winton Capital Management Ltd. make progress — albeit slowly — toward its founder's goal of becoming a $100 billion company. The firm's ticket to quadrupling its assets under management is unlikely to be one of its scientifically designed manag

  2. Opalesque Roundtable: Success in hedge fund marketing not linked to performance, but investor appetite[more]

    Komfie Manalo, Opalesque Asia: Success in marketing a fund is not linked to the performance, but to investor appetite, to the way you can market the fund, and to how much time you can spend to raise assets, said Antoine Rolland, the CEO of incubator and seeding firm

  3. Opalesque Radio: Now is a good time to buy protection cheaply in the options market[more]

    Benedicte Gravrand, Opalesque Geneva: Investors are showing an increased interest in risk parity funds and strategies, Opalesque reported last year. Risk parity strategies have the

  4. The Big Picture: Charlemagne Capital smoothes risk out of frontier market investing with portfolio approach[more]

    Benedicte Gravrand, Opalesque Geneva: Opalesque recently talked to one of the portfolio managers of the Oaks funds, which are emerging and frontier market hedge funds focusing on equity long/short with a directional approach. They are run by

  5. Winton’s low-cost equities fund tops $1bn for first time[more]

    From FT.com: Winton, the London-based hedge fund, has increased the assets in its low-cost equities fund to more than $1bn for the first time in a sign that traditional stock managers may come under increasing pressure from computer-driven rivals. Winton, which manages about $25bn in total ass