Wed, Mar 4, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

GAM's hedge fund team reports mixed results for October

Tuesday, November 06, 2012

Anthony Lawler
Opalesque Industry Update - GAM's October performance update reports that October was an eventful month with continued policy uncertainty in Europe and the US, corporate earnings broadly disappointing and super-storm Sandy disrupting the US East coast and US markets. Global markets were generally weaker with commodities and equities delivering negative returns for the month. The MSCI World index was down 0.6% in US dollar terms.

Hedge funds delivered mixed results in October but in aggregate closed in negative territory. The HRFX Global Hedge Fund index lost 0.5%, bringing its year-to-date performance to 2.1%. At the strategy level, event driven, global macro and relative value approaches all posted negative returns according to the HFRX strategy indices. Equity hedge managers had a positive month, helped by gross and net exposure levels well below long-term averages.

Anthony Lawler, Portfolio Manager at GAM, said: "Policy uncertainty on both sides of the Atlantic was arguably a dominant factor influencing global markets in October. Investors and corporates remain hesitant to invest and hire when the policy, tax and regulatory framework is in flux. Europe is debating its way toward a hoped 'muddle through' solution. However, there are still numerous country-specific hurdles to clear. In the US, investors face the dual uncertainties of the election and the fiscal cliff. Given these unknowns, they generally remained cautious or de-risked their portfolios by selling during October. Notably even sovereign bonds, that are commonly perceived as safe havens, sold off with UK gilts, US treasuries and German bunds all producing negative price moves for the month."

October was a challenging month for many managers and this included trend following CTAs. These managers in aggregate held portfolio positions that typically act balanced, as they were positioned long bonds, a bearish bet, against long equities and long energy, bullish bets. In October all three of these positions moved together and resulted in a negative month for CTAs.

Lawler added: "A number of hedge fund managers across strategies turned more positive after the Fed's QE3 announcement in September. In October, these managers' more bullish views proved generally unhelpful for those long risk assets outside of structured credit. But constructive and risk-on positioning did continue to help managers of structured credit positions and some relative value managers, where we continue to see solid out-performance. That said, at the end of October many hedge funds have slightly reduced risk going into the US election, but they stand ready to add risk back on once a clear result emerges."

press release

bc

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. Outlook - Philippe Jordan predicts 'alternative beta' to displace hedge funds, Stan Druckenmiller says Europe, Japan stocks will outpace U.S.[more]

    Philippe Jordan predicts 'alternative beta' to displace hedge funds From Investordaily.com.au: The disappointing performance of hedge funds in recent years is a result of "too much money chasing too little alpha", argues Capital Fund Management. Speaking to InvestorDaily, CFM partner Phi

  2. 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

  3. 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

  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