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Komfie Manalo, Opalesque Asia:

In this challenging market environment, hedge fund strategies that have done a bit better and had some success, are the more actively traded, systematic strategies, stated Darren Wolf, head of hedge funds in the Americas at Aberdeen Asset Management.

Speaking at the latest Opalesque 2016 New York Roundtable, Wolf explained that these strategies are typically volatility-targeted and take the discretionary decision to lower risk out of the equation. This has helped in recent years, but added there certainly is no guarantee that they will continue to work.

"Actually what concerns us a bit is the amount of money that has entered this space over the last five or six years," he said. Wolf added that the prevailing market environment has created a situation where hedge fund managers in general don’t want to load up and take a lot of risk, and yet the market has continued to climb higher.

"To be fair, this isn’t an environment where we expect hedge funds to outperform. Hedge funds will never keep up with persistently rising markets, especially if those markets seem disconnected from underlying economic fundamentals," he said.

Wolf believes the hedge fund industry is heavily affected by the continuation of a number of trends that have persisted for the past couple of years. He sai......................

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