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In the week ending December 9th 2022, data released by HFR revealed that hedge funds extended gains in November, as interest rates posted sharp declines as generational inflationary pressures began to moderate, while investors positioned for the U.S. Federal Reserve to decrease the pace of future interest rate increases.
Heading into year end, hedge funds have further lowered equity market exposure, with more concentration of long positions. And in terms of short positions, hedge funds are favoring use of ETF baskets and futures to hedge the short side rather than selling individual stocks in this macro-driven market characterized by elevated correlations.
Meanwhile, with traditional equity and bond portfolios underwhelming investors this year and China's market returns letting them down, Asia's most active seed-fund providers are ploughing money instead into hedge funds with strategies not correlated to major macro trends. That means hedge funds may struggle to raise start-up capital in the coming months unless their portfolio is set up to exploit market volatility or a futuristic theme, such as clean energy.
In performance news the biggest losses for Dan Loeb's multistrategy fund came in its private book. Third Point suffered another monthly loss of 0.5 percent in November - and this time, the multistrategy fund can blame...................... To view our full article Click here
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