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Komfie Manalo, Opalesque Asia:

Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Asset Management said in its Weekly Briefing.

Global macro funds were up +0.9% during the same week and outperformed in September with +2.3%. Lyxor said that their constructive view on the global economy started to pay. Last week, their longs USD vs. EUR and oil were particularly rewarding.

Jean-Baptiste Berthon, Lyxor AM senior strategist, commented, "Asset and sector rotations accelerated this week. US yields kept on adjusting to the Fed, which has been signaling that it will proceed with normalization. In addition to US rate-sensitive sectors, it boosted Europe and Japan equities, but weakened emerging market (EM), metals and gold. President Trump also unveiled its tax blueprint."

He said that this is a best case scenario, which will be curtailed, but it does revive fiscal hopes. Those companies most sensitive to tax and foreign earnings repatriation were back in full swing this week. "These two developments reverberated in hedge funds," Berthon said.

On the losing side, CTAs were hit on their equities as well as on their short dollar positions, partially offset by their short on agricultural. CTAs allocations materially changed. They have f......................

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