Sat, Mar 28, 2015
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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

 

banner