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Alternative Market Briefing

Swing Capital +3.33% YTD as assets slowly approach $100m mark

Thursday, June 09, 2011

From Kirsten Bischoff, Opalesque New York:

Currencies have been an untamable beast for many hedge funds in 2011. Macro funds have had a difficult time maneuvering currency bets due to the whip saw motion of the Euros as it took a hit over sovereign debt concerns, but has since strengthened since the end of last month. Long term and short-term trend following currency funds have also taken hits during the course of 2011. BarclayHedge Currency Traders Index in May was -0.88% (est) and for the year it stands at only 1.13%.

For currency focused Swing Capital, a Montreal based manager that oversees the $70m Swing FX strategy (which is implemented across managed accounts), the 2011 currency environment has been conducive to the firm’s short-term, contrarian positioning. Posting positive performance in May, the fund was up + 1.73% (+3.33% YTD), "What we are doing is not only short-term, but we try and capture the short- to medium- term collapse of different trends," explains co-Portfolio Manager Frederic Bettan. "We have seen a great deal of these collapsing trends over the past few weeks, which has proven to be excruciating for many managers."

The contrarian nature of their strategy has Swing FX buying currencies as they drop and selling them as they rise. "Most of the volume in the currency world these days is trend following. When the Euro goes up these funds buy more and more of it, and it continues to ......................

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