S&P reviews alternative strategies
Strong market demand for specialist strategies has led Standard & Poor’s(S&P) to review funds offering exposure outside of more traditional varieties as part of a standalone peer group.
Included in the review were single manager hedge funds, income funds, tactical allocators and multi-strategy funds.
S&P found that the highly anticipated growth of multi-strategy funds had not materialised and that the funds on offer in this sub-peer group suffer from positioning and cost/reward ratio problems.
In terms of the tactical sub-peer group, quantitative funds experienced poor performance, but their fundamental/technical counterparts delivered much better results.
S&P said further breadth of strategies and the incorporation of shorter-term momentum-style indicators would help the quantitative-style funds in the tactical sub-peer group to adapt to changing market conditions.
S&P scored single-strategy hedge fund managers well, but pointed out the high fee levels, and also gave income funds a positive review, especially the more established managers that combine strong stock picking skills with derivatives experience.
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