Tue, Sep 30, 2014
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. Socially responsible investments grow in demand, but performance questions persist[more]

    Komfie Manalo, Opalesque Asia: A study by financial services firm TIAA-CREF showed that interest in socially responsible investing (SRI) is increasing rapidly, but investors are still asking if investing in an SRI strategy

  2. Outlook - Julian Robertson: There are two bubbles that can bite us[more]

    From Businessinsider.com: Legendary hedge fund manager Julian Robertson gave a warning about two bubbles that could "bite us" at Bloomberg Market's Most Influential Summit. "I agree with the fact that the economy is definitely getting better. I think the cause of that is two bubbles that will

  3. Manager Profile: Leon Cooperman: The stock market is 'fairly valued,' but the bond market is 'overvalued'[more]

    From Businessinsider.com: Leon Cooperman of Omega Advisors and Howard Marks of Oaktree just finished a panel at Bloomberg's Most Influential Summit. Bloomberg TV's Stephanie Ruhle was the moderator. The two titans, who have known each other for 40 years, spoke about the market and the state of

  4. North America - Some newly registered U.S. hedge fund advisers are ‘cherrypicking’[more]

    From Reuters.com: Some newly registered U.S. hedge fund advisers are "cherry-picking" investments to showcase their performance and improperly changing how they value securities, an agency official said on Monday. Andrew Bowden, head of the SEC's Office of Compliance, Inspections and Examinati

  5. Regulatory - Ireland launches structure for passporting loan origination funds within EU[more]

    From Asiaasset.com: The Irish Funds Industry Association (IFIA) has introduced new loan origination capabilities that will offer Asian managers and investors a new structure under the European Union’s (EU’s) Alternative Investment Fund Managers Directive (AIFMD). The new structure will allow the mar