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Komfie Manalo, Opalesque Asia:

Hedge funds gained last month as the Lyxor Hedge Fund Index was up +0.3% (+4.1% YTD) thanks to the positive returns delivered by CTAs, global macro and L/S equity strategies, Lyxor Asset Management said in its weekly briefing.

On a negative note, event-driven strategies underperformed lately. This has taken place in a context where critical deal spreads widened, such as Time Warner vs. AT&T and NXP vs. Qualcomm. Nonetheless, Lyxor maintains an overweight stance on event-driven and continue to believe that the strategy should benefit from U.S. tax reform.

Lyxor AM Senior Strategist Philippe Ferreira commented, "In the hedge fund space, trend reversals were harmful earlier in November, however, CTAs still managed to outperform last month as a result of their long allocations to European fixed income and short USD stance. The Lyxor CTA Broad Index was up +0.8% in November. Meanwhile, event-driven underperformed (-1%) as some deal spreads that rank high in merger arbitrage portfolios, such as Time Warner vs. AT&T, widened."

Ferreira noted that over the recent weeks, risk appetite faded in a context where investors appear to be securing gains achieved during a strong year for equities. The MSCI World still managed to climb higher in November, for the 13 month in a row, fueled by U.S. and Japanese indices.

European equities were down in local currency, negatively impacted by currency ......................

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