{"id":29644,"date":"2013-07-22T09:09:12","date_gmt":"2013-07-22T07:09:12","guid":{"rendered":"http:\/\/beta.next-finance.net\/opinion\/more-upside-in-2013-for-hedge-funds-says-lyxor-research\/"},"modified":"2013-07-22T09:09:12","modified_gmt":"2013-07-22T07:09:12","slug":"more-upside-in-2013-for-hedge-funds-says-lyxor-research","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/opinion\/more-upside-in-2013-for-hedge-funds-says-lyxor-research\/","title":{"rendered":"More upside in 2013 for hedge funds, says Lyxor research"},"content":{"rendered":"<p><em>Markets have digested the higher move in bond yields and any further rise in yields will occur because of firmer economic data.<\/em><\/p>\n<p><strong>Central banks globally are almost unanimously dovish which should translate into asset reflation and easy financial conditions.<\/strong> The Bank of England and European Central Bank were the latest banks to use \u201clower for longer\u201d language to drive down interest rates. Chairman<br \/>\nBernanke has also indicated that the Fed will hold rates at the current 0% level for the foreseeable future.<\/p>\n<p><strong>At the same time, economic data is improving. High velocity indicators in Europe such as PMI are increasing from a dip in 1Q<\/strong> and broad data in the US such as jobs, spending and production are also suggesting the economy is improving.<\/p>\n<p><strong>The volatility spike and risk aversion in June presents<br \/>\nan attractive entry point and opportunity going forward.<\/strong><br \/>\nRisk premium increased because of higher rates and<br \/>\nconcerns about emerging markets. Both of these issues<br \/>\nhave stabilized. Bond yields in the US have repriced<br \/>\nsharply since May but the pace of the increase will likely<br \/>\nslow going forward. China concerns have also dissipated as the authorities introduced more liquidity into the<br \/>\nmarket. We expect risk premium normalization to<br \/>\ncontinue which translates into higher asset prices.<\/p>\n<p><strong>Equities are our favorite asset class and a key<br \/>\nbeneficiary of asset reflation.<\/strong> Based on our metrics,<br \/>\nequities are significantly more attractively valued than<br \/>\nother assets at this stage in the cycle. Within equities,<br \/>\nJapan is our most overweight region because it offers the<br \/>\nbest upside given the size of central bank stimulus and<br \/>\nattractive valuation.<\/p>\n<p><strong>In our Alternative Strategies ranking, we have an<br \/>\noverweight bias to directional strategies in the equity<br \/>\nspace. L\/S Equity discretionary and systematic neutral<br \/>\nstrategies<\/strong> should benefit from a high dispersion, low<br \/>\nvolatility environment. We upgraded Long term CTAs to<br \/>\nslight overweight after a challenging 2Q because we<br \/>\nbelieve the factors responsible for the soft performance,<br \/>\nsuch as a spike in rates, will be more benign going<br \/>\nforward. On the credit side, the market appears richly<br \/>\nvalued and we downgraded L\/S credit to neutral. We<br \/>\nadvocate focusing on relative value funds in the credit<br \/>\nspace with limited interest rate risk.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The remainder of 2013 is setting up for further gains<br \/>\nand hedge funds are positioned to take advantage of the<br \/>\nopportunities. The US economy is expanding steadily<br \/>\nand growth will likely accelerate in the 2nd half of the year<br \/>\nas fiscal restraint wears off. <\/p>\n","protected":false},"author":1,"featured_media":29642,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1480],"tags":[1809,1687,1743,1655,1658,1723,1813,1690,1699,1716,1651,1437,1807,2068,1672],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/29644"}],"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=29644"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/29644\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/29642"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=29644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=29644"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=29644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}