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Komfie Manalo, Opalesque Asia:

Philippe Ferreira, Lyxor AM’s head of research, managed account platform, said that hedge funds acted as shock absorbers during the wide market gyrations recorded at the beginning of 2015 as the year started with a large risk-off move and high volatility on all asset classes.

In its Weekly Brief, Lyxor said that oil prices, rates and equities went sharply down as economic activity was below expectations in December and a potential Greek exit is making the headlines again in Europe. The U.S. dollar posted strong gains, especially against the Euro, fuelled by the expectations that the ECB will find a consensus to adopt expansionary measures as the Eurozone entered deflation.

Ferreira said, "Although the release of the minutes of the 16-17 FOMC (Federal Open Market Committee) meeting provided some relief, if the first week of the year can give any sense of the upcoming market conditions, we are facing more challenging times ahead for risk assets. The good news is that we can expect downside protection from hedge funds in these market conditions: In a tough context, they continued to provide alpha. Indeed, despite a median equity beta still at high levels (32%), the Lyxor HFI ended the week down only 45ps, while the MSCI World was down close to 4.0% (between Dec 30th and Jan 6th)."

Hedge funds ended the week on a decent note amid tough market conditions. The Lyxor Hedge......................

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