Despite fairly divergent hedge fund trends in the second quarter, SG Private Banking’s strategists remain positive but have a preference for Relative Value and Event-Driven.<\/p>\n
\nAfter a positive April, the performance recorded by most of the hedge fund strategies was negative in May except for \u201cRelative Value\u201d which managed a slight gain.<\/p>\n
During the first two months of the quarter, \u201cRelative Value\u201d and \u201cTrading Directional\u201d achieved the best performance at +1.1% and +0.7%, respectively. The two strategies have pursued rather different courses: the \u201cRelative Value\u201d strategy posted gains in April and in May of +0.8% and +0.3%, respectively, whilst the \u201cDirectional Trading\u201d strategy made significant gains in April (+3.3%) that were sharply cut back by losses in May (-2.5%). The falling dollar and the rise in commodity prices were the two main factors behind performance volatility.<\/p>\n
In terms of sub-strategies, Global Macro (+2.2%) and Corporate Credit L\/S (+1.2%) achieved the best performance over the last two months.<\/p>\n
We remain positive on the four main strategies, but have a preference for Relative Value and Event-Driven. Inversely, we are somewhat more cautious about \u201cDirectional Trading\u201d, which should remain volatile.<\/p>\n
We have lowered the rating for the \u201cGlobal Macro\u201d strategy to positive (from highly positive) owing to performance levels that failed to match our expectations and a greater- than-expected dispersion at manager level. We still prefer defensive asset managers within the strategy, even if they also suffered from the oil price correction, because we consider them more interesting in an environment where economic and geopolitical uncertainty remains prevalent along with sudden changes in tendencies (silver, oil, dollar, etc.).<\/p>\n
Within \u201cRelative Value\u201d strategies we have upgraded both statistical and fundamental equity arbitration. These strategies have no net exposure to equity markets and are profiting from the sharp correlation drop within sectors. After a peak arising from the Japanese crisis, correlation levels have returned to a situation not seen in several years. <\/p>\n
Inversely, we lowered our rating for government bonds to marketweight as a result of managers\u2019 difficulty in delivering significant performance despite the scheduled end of the US quantitative easing 2 program.<\/p>\n
After the fall in rates over the past two months, the Credit Long\/Short strategy is still an interesting alternative to government bonds as a means of protection against rates bouncing back. Credit Long\/Short managers are currently for the most part exposed to high-yield corporate debt. The rate premium level in this type of bond (4% to 7%) clearly provides a cushion to absorb a pick-up in rates. In addition, most managers add specific protection to neutralise the impact of rising rates.<\/p>\n","protected":false},"excerpt":{"rendered":"
Despite fairly divergent hedge fund trends in the second quarter, SG Private Banking’s strategists remain positive but have a preference for Relative Value and Event-Driven.<\/p>\n","protected":false},"author":1,"featured_media":19253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1483],"tags":[1748,1809,1687,1743,1655,1723,1651,1661,2243,1669,1967],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/19255"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=19255"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/19255\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/19253"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=19255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=19255"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=19255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}