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Komfie Manalo, Opalesque Asia:

Hedge funds showed resilience in challenging market conditions according to the Lyxor Hedge Funds Index, which was down slightly at -0.4% for the week ending January 12 – 19 (-1.2% YTD). Performance was supported by CTAs, Lyxor Asset Management reported.

Compared to U.S. stocks, hedge funds still outperformed the S&P 500, which has declined -8.2% so far this year.

On a strategy-by-strategy basis, Lyxor said that trend following (+0.6%) benefited from their long U.S. and Europe fixed income positions and short exposure to commodities (in particular energy). Global macro (+0.3%) delivered mixed results on the back of divergent views across managers, in particular, in fixed income. Strategies with less directionality also outperformed their long bias peers. The L/S equity group was marginally hurt by the market plunge.

Philippe Ferreira, a senior strategist at Lyxor AM said, "Last week we saw another round of aggressive de-risking. Both markets and analysts ended 2015 with reasonable growth expectations. These were aggressively revised down since the beginning of January - triggered by the release of disappointing Chinese PMI and the CNY depreciation."

He added that over the past week, the markets saw an acceleration of a domino of themes - slowing china; weaker oil; slower emerging markets growth, slower global growth,......................

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