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Komfie Manalo, Opalesque Asia: The repricing of tapering expectations continued in the first week of July, bolstered by the French auction, broken technical resistance, and by strong European economic prints. It pushed yields further up and saw the Lyxor Hedge Fund Index nearly flat at -0.1% from 27 June to 04 July (-0.1% YTD).
Jean-Baptiste Berthon, Senior Strategist at Lyxor Asset Management commented, "The bond correction boosted global macro funds' long Eurozone bonds. Fixed income arbitrage funds were also adequately positioned. They made up for the substantial CTAs losses in their long bond, short energy and short agricultural buckets. The other strategies were resilient. Event driven funds were boosted by positive M&A developments."
He added that diversified L/S equity were reasonably spared by the bond correction. It did not lead them to alter their allocations, though they marginally reduced their net and cyclical exposures. Specifically, funds holding tech stocks generally remain confident in the long-term growth story. European managers remain bullish on the region with a tilt on the most cyclical sectors.
"Within event-driven, positive M&A developments in the Time Warner, Stada Arzneimittel and Rite Aid deals boosted merger funds' returns," Berthon added.
Financials, dollar assets continue to outperform
Lyxor said that financials and dollar assets continued to outperform the tech sector...................... To view our full article Click here
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