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

Digital assets arbitrage outperforms

Nickel Digital Asset Management's flagship fund outperformed in March despite continued volatility across digital asset markets. The Nickel Digital Arbitrage Fund was up +0.09% net of fees in March and is up +2.23% YTD.

The fund launched in June of 2019 and focuses on cross-venue arbitrage opportunities, utilizing a systematic approach. Nickel closed an early funding round in March, which will allow the firm to expand operations and grow the strategy.

According to a performance note sent to investors and reviewed by Opalesque, the fund was able to capture the moves in Bitcoin in early March which drove the month's returns. "On March 12th the CV19 shock suffered in traditional markets spread to the digital asset markets causing BTC to drop rapidly, losing half of its value in less than 24 hours. As an arbitrage fund, we usually have positions with different market directions on separate exchanges: for the basis trade we were long spot BTC on several exchanges and short futures positions on three derivative exchanges. Rapid and large market moves cause significant price and collateral imbalances at exchanges and this event battle proved our trading and collateral management systems. We automatically took off a basis position of over $25 mln during two days and quickly pre-paid the loan structures we used for funding this position so capturing profits from the abrupt market move," the fund said.

Biotech maintains momentum

Vista Point Capital's flagship biotech fund - Parallax Biomedical Fund is up 3.01% year to date following strong performance in 2019. The fund ended the year up 54.20% following strong activity in the sector. Parallax beat the Nasdaq Biotechnology Index which is down -10.4% year to date.

Parallax makes investments in small-cap biotechnology and medical technology companies. The investment team is typically looking for companies that have later stage products in development or those that have low valuations with room to grow. The fund runs a concentrated portfolio of 20-25 core positions.

Small-cap companies have been under significant pressure in the downturn as shutdowns tend to have a more immediate impact on small firms. However, the services of biotechnology and medical technology companies remain in high demand insofar as they can help to provide virus relief. As countries begin to open up and people return to work, these companies may become a source of innovation to help manage the health risks associated with the virus.

Short-term volatility strategies pay off Swiss firm Deep Field Capital has had a positive quarter across its suite of short-term volatility strategies.

The Intraday Crisis Alpha (ICA) program which trades intraday momentum in the global equity index futures market is up +3.84% through April 24 and is up +13.64% YTD. Intraday Convexity Capture (ICC) which trades intraday momentum on the US VIX futures market is up +0.64% through April 24 and is up +3.13% YTD. Intraday Momentum Blend (IMB) which is a blend of the prior two strategies is up +4.84% through April 24 and is up +16.36% YTD. Systematic Volatility Arbitrage (VolArb) which is a multi-strategy volatility arbitrage program that trades VIX and S&P500 futures is up +6.85% through April 24 and is up +19.59% YTD. Finally, Liquid Equity Alpha (LEA), an intraday mean reversion fund that trades US stocks, is up +2.49% through April 24 and is up +49.96% year to date.

According to a performance update sent to investors and reviewed by Opalesque, it's too early to tell if the recent uptrend in US markets will hold. "All of our programs are carefully navigating this confusing environment of ever larger stimulus packages, skyrocketing unemployment numbers and historic market events such as negative crude oil prices," the update said. "While we surely don't know what the future will bring, one may carefully suggest that volatility is here to stay, as a quick view on the VIX term structure suggests."

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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; Report 15; and Report 16

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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.

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