Sun, Jun 24, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund managers are bearish on US Treasuries, many expect another recession

Tuesday, July 05, 2011
Opalesque Industry Update – The outlook shared by many hedge fund managers is not particularly promising, according to a new report by TrimTabs Investment Research and BarclayHedge. The firms, which interviewed 87 hedge fund managers, found that 38% are bearish on the S&P 500, a significantly higher percentage than were bearish in May (29% higher in fact). The managers were also rather downbeat on US treasuries and almost half expect the US to slip into another recession in the next year.

“Downbeat views on domestic stocks characterized the first half of 2011,” says Sol Waksman, founder and President of BarclayHedge. “Hedge fund managers were net bearish on the S&P 500 in four of the first six months of the year. The grim mood coincides with weak performance. The Barclay Hedge Fund Index shows a year-to-date return of just 1.8% after increasing 10.9% in 2010.”

June marked another difficult month for many hedge funds.

While hedge fund managers are still expressing a bullish sentiment on the US Dollar Index, they are growing vastly more pessimistic over US Treasuries. “Hedge fund managers may not like Treasuries, but our flow data shows that investors of all stripes are not shying from bonds,” notes Vincent Deluard, Executive Vice President at TrimTabs. “Bond mutual funds, bond ETFs, and fixed income hedge funds continue to post sizable inflows. Meanwhile, hedge fund managers tell us that they aim to increase leverage in the coming weeks even though they are relatively downbeat on stocks. Aggressive bets from this crowd could support equities in the second half of the year.”

Additional expectations from managers include:

  • An end to quantitative easing
  • Weaker corporate earnings for 2H2011
  • Another recession in the next year

“The recent correction in stock prices gave rise to fear,” notes Deluard. “Margin debt decreased for the first time in 11 months, short interest increased to the highest level in six months, and the speculative crowd turned net sellers of equity futures. But equities have rebounded smartly because recent economic data shows that the soft patch was not the start of something more serious, and we are interested to see how managers adjust.”

Source

Kirsten Bischoff

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. Paper: The performance of stocks actively pitched by hedge funds[more]

    Using a novel dataset drawn from investment conferences from 2008 to 2013, I show that hedge funds take advantage of the publicity of these conferences to strategically release their book information to drive market demand. Specifically, hedge funds sell pitched stocks after the conferences to ta

  2. North America - US fundraising for special purpose acquisition vehicles hits record this year[more]

    From AFR.com: Special purpose acquisition vehicles (spacs) are hitting the US market at the fastest rate on record, attracting the likes of Goldman Sachs and hedge fund investor Daniel Loeb for the two largest such deals in 2018. Spacs have raised $US4.5bn so far in 2018, the largest amount fo

  3. Investing - Man Group and AQR try to take aim at private equity industry, Hedge funds poised to be winners in AT&T-Time Warner deal[more]

    Man Group and AQR try to take aim at private equity industry From FT.com: The popularity of private equity investments has prompted asset managers such as Man Group and AQR to devise strategies that aim to replicate PE returns but at a much lower cost to investors. Both companies a

  4. News Briefs: David Stemerman's hedge fund holdings shrank before his run for governor, nvestment manager TSW triggers succession plan, Alan Howard joins Peter Thiel investing in Cologne-based fintech startup[more]

    David Stemerman's hedge fund holdings shrank before his run for governor But the U.S. holdings of Stemerman's Greenwich hedge fund, Conatus Capital, shrank from $2.6 billion at the apex to just over $1 billion before he announced his move into politics. (Hartford Courant) Inv

  5. British Empire: Pershing's 23% discount 'unsustainable'[more]

    From Citywire: The wide discount on Pershing Square Holdings (PSH) is 'unsustainable' and puts star hedge fund manager Bill Ackman under pressure, says British Empire (BTEM). Pershing is the third largest holding in the £850 million British Empire trust, managed by Joe Bauernfreund, which sp