Hedge funds break poor performance pattern
The latest figures from the Credit Suisse/Tremont Hedge Fund Index indicate that hedge funds posted modest losses for the month of November.
An early statement from the managers of the index said hedge funds in the broad index are expected to finish down 0.71 per cent for November, a figure based on 69 per cent of returns received.
“The overall hedge fund industry is expected to post modest losses in November, which is welcome news after two of the lowest months of performance on record,” the statement said.
“Continuing downward trends in US Treasury yields, commodity and currency markets led to positive performance for the global macro and managed futures sectors and helped mitigate the losses from other sectors.”
The statement said several sectors did capitalise on the equities rally at the end of the month, but that this did “not appear to have been a main driver of performance due to its short duration”.
According to the index’s early figures, managed futures was the best performing sector in the broad index, finishing the month up an estimated 3.21 per cent, with 90 per cent of funds having reported. Three other sectors are also expected to end the month in positive territory: dedicated short bias, equity market neutral and global macro.
“The continued commodities bear market benefited the global macro and managed futures sectors as short positions in the commodities sector led to gains for the month,” the report said.
In the month of November, yields on 10-year Treasury bonds also dropped to record lows, falling below 3 per cent.
“Some analysts currently forecast a further decline in yields if the US Federal Reserve lowers interest rates in December as expected.”
Furthermore, if the US Federal Reserve’s Term Asset-Backed Securities Loan Facility is successful, there may be a possible investment shift from treasuries to other securities. This could begin to create opportunities in the relative value sectors as well, the report said.
Recommended for you
Platinum Asset Management has put its two closed-end funds under strategic review in a bid to reduce the share price discount to pre-tax NTA and maximise shareholder value.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.