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Alternative Market Briefing

The Corona Fighters Collection chronicles extraordinary funds in extraordinary times

Wednesday, July 01, 2020

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B. G., Opalesque Geneva:

From the beginning of April right up until last week, Opalesque posted regular updates on hedge funds and other alternative funds who beat the markets, by either outperforming them - especially in Q1 - or protecting assets. We called them the Corona Fighters.

We have since produced a compendium of the 52 reports in an e-book called The Corona Fighters Collection. The book also contains fund classifications so readers may find the 200+ funds either by name, manager or strategy.

Hundreds of investors have pre-ordered the 176-page e-book, which is available in PDF and ePUB formats. And you can now download it here: www.opalesque.com/ebook/

The Corona Fighters Report Series is being continued. To be included, managers should send their monthly return sheet to Matthias Knab (knab@opalesque.com). If it does not include an adequate description of the strategy and CV information on the manager(s), the full investor presentation should be included.

Extraordinary times

While the S&P500 lost 19% in Q1 (currently -5.5% YTD), the HFRI Fund Weighted Composite Index was down -8.4% (currently -5% YTD), and financial markets experienced a historic spike in volatility in March, the Corona Fighters funds remained in positive territories.

"Uncorrelated, defensively and long volatility-positioned hedge fund strategies posted impressive, negatively-correlated gains for the month (of March), while directional equity-sensitive, long-biased, and arbitrage strategies posted sharp declines. Macro and trend-following strategies are likely to continue to lead industry performance with models evolving to effectively capture dynamic, fluid and shifting trends as the pandemic progresses," said Kenneth Heinz, president of HFR, in early April.

While some Corona Fighters are focused on being truly uncorrelated to the to the direction of stocks, bonds, commodities or other asset classes, brushing aside all dramatic market commentaries and trends, others gained through their factors, exposure adjustments, stop-losses, alternative edges or asset classes, quantitative analysis and AI, systematic trading, effective asset allocation, behavioural edge and volatility. A few of the funds had just got launched and so got their baptism by fire. And some had been aware of the coming pandemic since January and prepared for it. All showed sufficient flexibility to make a positive experience out of these unusual times.

March 2020 will be studied by market historians for years to come

"March 2020 will be studied by market historians for years to come," said a manager. "There has never been a similar combination of economic shocks, market reactions, and policy responses in so short a time."

"You cannot put your seatbelt on in the middle of a car crash; you must have it on before it ever begins," said another.

"2020 will go down in the books as an important year for hedge fund allocators to examine how managers performed during the various market environments we've witnessed over such a short period of time," commented a fund of hedge funds manager.

"Specifically, the months of March, April, and May have endured both a bear market and bull market as most commonly defined, all within this short three-month period. Furthermore, the markets have been chaotic and illiquid at times affording an allocator further intelligence as to how a manager handles risk and liquidity. It has become crystal clear as to who is correlated to the direction of markets and who isn't during these past months. There has been no hiding as market moves have been too material and too chaotic simply to "get lucky"."


Thousands of investors joining Corona Fighters webinars

Some of the Corona Fighters presented their funds in webinars which you can replay here: www.opalesque.com/webinar/#pastwebinar

More will be presenting in our next webinar, The Corona Fighters Episode 4, on 21st July at 10 am EST:
- Nancy Davis, Managing Partner & CIO, Quadratic Capital Management;
- William O. Perkins III, CIO and Managing Partner, Skylar Capital Management;
- Kapil Rastogi, CFA, President, PlusPlus Capital Management;
- Nicholas Bovell, CIO, Carcharodon Capital and
- Marc Pentopoulos, Managing Partner, Vista Point Capital.

You can register to the webinar here: www.opalesque.com/webinar/

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