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Alternative Market Briefing

Prevailing market trend is a friend to hedge funds

Wednesday, March 09, 2016

Komfie Manalo, Opalesque Asia:

The prevailing market trends have proven to be supporting hedge funds, Lyxor Asset Management said in its monthly briefing. The Lyxor Hedge Fund index fell 2% year-to-date as of February, while the S&P 500 is down 7.6% during the same period.

Philippe Ferreira, senior cross-asset strategist at Lyxor AM said in a video briefing, "After a very tough start to the year, market conditions improved recently. Risk assets rallied after the Federal Reserve signaled that growing risks to the U.S. economy could deserve a delay in interest rate hikes."

He continued, "The market environment remains nonetheless fragile as global growth conditions remain weak. Manufacturing PMIs for February in the U.S., Europe and China were below market expectations while activity in the non-manufacturing sector has lost momentum. Such market conditions have proved supportive for hedge funds."

Ferreira said that CTAs continued to outperform last month despite trend reversals in equity and commodity markets. Their long positioning on fixed income and the USD versus the euro proved supportive as central banks remain very accommodative. In February, the Lyxor CTA index is up 1.7% after, bringing the YTD performance to an impressive 5%.

Hedge funds remain defensive

The remaining hedge fund strategies are in negative territory, both in February and on a year to date basis. Strategies which tend to be more......................

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