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Komfie Manalo, Opalesque Asia:

Event-driven and fixed income hedge fund strategies outperformed from 18 July to 25, and year-to-date, Lyxor Asset Management said. The Lyxor Event Driven Broad Index gained 0.5% during the period (+6.8% YTD), while the Lyxor Fixed Income Broad Index was up 0.1% (+4.0% YTD). The Lyxor Hedge Fund Index was flat in July.

"Recent trends can be looked from different perspectives in the hedge fund space," Philippe Ferreira, senior strategist at Lyxor AM said. "On the one hand, the strategies that did well over the recent months and which we have maintained an overweight position for several quarters outperformed in July. On the other hand, trend following strategies underperformed during all these timeframes. Overall, considering the elevated weight of CTA and global macro strategies in our indices, CTAs continue to be penalized by their commodity allocations as short positions on both energy and precious metals suffered last week."

Ferreira said that event-driven is a strategy on which Lyxor maintains an overweight stance. Last week, performances were led by the energy, health care and consumer cyclical sectors. Merger arbitrage outperformed special situations in July and is a strategy that appears particularly appealing in the context of richly valued traditional assets. Over the past five years, the beta of the strategy (vs. MSCI World) was in the 5-15% range, depending on the index.

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