•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Amid the current market turmoil, this is our regular report on hedge fund and alternative asset managers who are bucking the trend.

Effective hedging

Amanda Howard's Bastiat Capital is part of a small group of CTAs that still act as effective hedges in a downturn. The firm's flagship fund was up 16.96% in March and is up 25.3% year to date, according to a performance update to investors reviewed by Opalesque.

The Divergence Fund is designed to provide returns over a cycle while also providing alpha during times of volatility. The multi-trend systematic program tracks medium, long, and ultra long-term trends across agriculture, currencies, indices, interest rates, metals, and energy. The fund has also reinforced its execution capabilities to ensure that it can respond effectively to changes in market trends.

Bastiat offers its trading program through separately managed accounts.

Shorting Macau pays off

It's no secret that coronavirus has hit the hospitality/casino/gaming sectors particularly hard as hotels and casino floors have closed somewhat indefinitely. Few discretionary managers were able to catch on to the trend early enough to get into strong short positions ahead of the crisis. However, the APS All China Long Short Fund (ACLSF) was on the right side of that trade. According to a recent investor update reviewed by Opalesque, APS' short positions in two Macau gaming operators were top contributors to the strategy's outperformance in Q1. Macau's Gross Gaming Revenue was down 60% YoY for Q1, which saw the seemingly sharp Jan 2020 drop of 11% YoY later dwarfed by plunges of 80%-90% YoY in the next two months. "We remain doubtful of a meaningful Q2 recovery, especially in light of the recent rash of imported and asymptomatic cases being reported in China. Consumer appetite amidst a global demand slump will likely be dampened," the note said.

The fund is also looking at Las Vegas casinos that have ties to Macau as the shutdowns in Nevada are likely to compound losses. Asian retailers that are vulnerable to Amazon and other large on-demand distributors are also likely to feel additional pressure, the fund noted.

APS' All China Long Short Fund ended March up 3.02% net of fees and is up 4.07% net year to date. The strategy beat the MSCI Golden Dragon Index which was down -9.01% for the month and is down -13.34% year to date. The strategy also beat the Eurekahedge Greater China Long/Short Equities Index which is down -1.71% in March and down -1.70% YTD.

Machine learning leads the way

One of Germany's oldest AI-based UCITS funds came out on top at the end of the quarter. Tungsten Capital Management's TRYCON AI Global Markets Fund was up +3.32% in March and is up 3.25% year to date.

TRYCON is a short-term CTA strategy backed by a proprietary machine learning system that was one of the first developed in the region. The investment universe comprises some 60 global equity, bond, interest rate, and currency markets. In these markets, the fund can take both long and short positions using regulated, liquid, and exchange-traded financial instruments. The portfolio is dynamically adjusted to changing market conditions in accordance with strict risk management.

The strategy had its third-best monthly result since its inception in 2014. "The strategy positioned itself on the short side of both European and US stock indices at an early stage and was thus able to achieve significant gains there. In government bonds, the strategy was able to anticipate the volatile swings in the US quite well, but these gains were to a large degree offset by losses in European bond futures, resulting in only moderate net gains in the sector. The portfolio recorded a negative contribution from currencies, many of which experienced several changes of direction against the US dollar in March, with considerable volatility," the fund said in an investor update reviewed by Opalesque.

***

Prior issues of The Corona Fighters Report:
Report 1; Report 2; Report 3; Report 4; Report 5; Report 6; Report 7; Report 8; Report 9; Report 10; Report 11; Report 12; Report 13;Report 14; and Report 15.

***

Disclaimer: This is not investment advice. Opalesque has not verified this information and gives no warranty of accuracy or completeness. Past performance is not indicative of future results. See our Terms & Conditions for more information.

***

WEBINARS:

Watch the replay here: www.opalesque.com/webinar/#pw4

Meet five Managers and learn how and why their strategies delivered positive returns and/or protected capital during the Corona led market meltdown in one hour!

"A well-chosen topic of discussion and a great set of speakers to hear and learn from."
"I enjoyed the webinar and found the introduction to the strategies to be diverse and insightful.
"Very resourceful and insightful."

700 people registered for the CORONA FIGHTERS - Episode 1 webinar.

Don't miss EPISODE 2

Time: Tuesday, May 19th 10 am EST
Register: https://www.opalesque.com/webinar/

You will be able to tune in to this webinar from any computer, tablet, or smartphone. The webinar will be recorded - in case you are not able to join, all registered participants will be provided a link to replay the webinar.