Wed, Aug 27, 2014
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. Institutions – Texas Employees sets 2015 tactical plan for alternatives, CalPERS' real estate consultant cautions the pension fund's investment committee, Why Sunsuper likes hedge funds[more]

    Texas Employees sets 2015 tactical plan for alternatives From PIOnline.com: Texas Employees Retirement System will invest in up to four new hedge funds in the next fiscal year, which begins Sept. 1. Trustees approved 2015 tactical investment plans for the hedge fund, private equity and in

  2. Hedge fund assets decline in July - eVestment[more]

    Bailey McCann, Opalesque New York: Total assets in hedge funds declined in July and dropped 0.49%, marking the industry's second monthly asset decline in 2014, according to the latest asset flows data from eVestment. Despite the asset decline, total industry AUM remained above the $3 trillion

  3. AIMA makes 'the case for hedge funds'[more]

    Bailey McCann, Opalesque New York: The Alternative Investment Management Association (AIMA), the global hedge fund industry body,

  4. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius