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Komfie Manalo, Opalesque Asia:

Event driven hedge funds started 2017 on the right foot as the Lyxor Event Driven Broad Index was up 0.2% from 10 January to 17 and rose 1.9% YTD, Lyxor Asset Management said in its Weekly Briefing. However, the Lyxor Hedge Fund Index was down 0.8% during the same period (-o.4% YTD), dragged down by the underperformance of CTAs.

Both Merger Arbitrage and Special Situations delivered healthy returns, supported by the spread tightening of various deals and investments in consumer non-cyclicals and communication. The pullback of the USD was the main headwind for CTAs and global macro.

"In addition, CTAs suffered from their long stance on equities and their positioning on the fixed income space (short U.S. bonds, long European bonds). Global macro continued to experience dispersion in returns across managers," commented Jean-Baptiste Berthon, Senior Strategist at Lyxor AM.

CTAs down on Trump

Donald Trump took office as the 45th U.S. president at a time when the political, economic and geopolitical landscapes are rapidly changing. Many uncertainties remain regarding his agenda, in particular, on tax reform, deregulation and public spending, Lyxor said. Last week, various statements on the strength of the dollar, border taxes, and the fate of Obamacare raised further doubts. The funding of Trump's proposals, the cohesion of the administration and the Congress, and the impac......................

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