Tue, Mar 3, 2015
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. Investing - Seth Klarman of Baupost outlines his investment process as major stock market indices are stretched, Myriad hedge fund sold bulk of its Alibaba stake last year[more]

    Seth Klarman of Baupost outlines his investment process as major stock market indices are stretched From Valuewalk.com: As hedge fund manager Seth Klarman, leader of the $28 billion Baupost Group, reviews 2014 performance and considers investors gained near 7 percent on the year, he cons

  2. Investing - As rig count falls, hedge funds pile into long crude futures, Parus tactically shifts long/short exposure ratios, Mario Draghi outflanking Kuroda as bearish euro bets surge, Prime Capital’s 500.com bet derailed after 41% drop[more]

    As rig count falls, hedge funds pile into long crude futures From 247wallst.com: In the week ended February 27, the total number of rigs drilling for oil in the United States came in at 986, compared with 1,019 in the prior week and 1,430 a year ago. Including 281 other rigs mostly drill

  3. Opalesque Exclusive: dbSelect’s top ten FX strategies average almost 10% in January[more]

    Benedicte Gravrand, Opalesque Geneva: In one of Deutsche Asset & Wealth Management (AWM)’s hedge fund platforms, called dbSelect, a number of FX Strategies did very well in January. dbSelect is a managed investment platform for unf

  4. Opalesque Exclusive: SEC’s Mark J. Flannery warns hedge funds against valuation misconduct[more]

    Komfie Manalo, Opalesque Asia: Securities and Exchange Commission chief economist and director of Division of Economic and Risk Analysis (DERA) Mark J. Flannery has warned of the risks posed by market misconduct, particularly in the true valuation of assets by hedge fund managers. In his

  5. Dymon Asia's $3bn macro hedge fund lost 10.45% in January[more]

    From Reuters.com: Dymon Asia's $3.1 billion macro hedge fund lost 10.45 percent in January, performance data seen by Reuters showed, a month where many peers lost heavily after a surprise rise in the Swiss franc. Singapore-based Dymon, set up by Danny Yong, a former founding partner and chie