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From Kirsten Bischoff, Opalesque New York:
As May started, hedge funds are, on average, looking at YTD gains of anywhere from 2.5% to 3.5% (depending on the index and the strategy). They are also (as of last week) positioned very long across the board in equities, agriculture (corn), metals (Copper, Platinum), commodities (crude oil), Forex (Euro), and interest rates (2-year).
A report by Bank of America Merrill Lynch also shows that funds continue to up their leverage, with March’s growth gaining another 1.7% over February, and 32.8% over last year.
According to research by TrimTabs/BarclayHedge, March's hedge fund asset inflows were a still respectable $15.7bn, even though those numbers are down significantly from February, which generated inflows of $27.8bn. Commodity funds received almost half of the inflows in March ($6bn).
"Overall bearish sentiment notwithstanding, hedge fund managers remain inclined to increase leverage," says the report, which interviewed over 1,000 funds. It is the eleventh month that managers have indicated they would be increasing their use of leverage.
While investors are increasing their exposure to commodities, many managers (43%) in the TrimTabs/BarclayHedge survey indicated they expected oil had the best chance of experiencing a 10% correction, followed by gold, and then the dollar. No online Source
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