![\"dispersion_in_returns_back_to_normal.jpg\"](\"http:\/\/www.next-finance.net\/http:\/\/beta.next-finance.net\/wp-content\/uploads\/2015\/09\/dispersion_in_returns_back_to_normal.jpg\")
<\/a>Since the FOMC meeting on September 17th, the Fed\u2019s indecisive attitude has been
\nmet with mixed responses from the markets. A lack of guidance has not been
\nwelcomed by risk assets, bonds have rallied and the USD has eased against major
\ncurrencies. It is likely that this will fuel Global Macro and CTA managers in particular.<\/p>\n
Systematic funds are adequately positioned, being neutral equities and long fixed
\nincome. These funds also cut their long USD positions (especially against the EUR)
\nduring the summer. There are nonetheless discrepancies between the positioning of
\nshort term and long term CTAs. The former have less directionality in FX and
\ncommodity markets and appear to be better suited to capture any benefits from the
\nnew market regime. In fact, long term CTAs are still long USD and short
\ncommodities. The Fed\u2019s stance is likely to put downward pressure on the USD and
\nsome upward pressure on commodities.<\/p>\n
Meanwhile, discretionary Macro managers are also long fixed income and are set to
\nbenefit from the ease in bond yields following the downward revision of both the
\neconomic projections and the \u201cDot Plot\u201d .<\/p>\n
Finally, the Fed\u2019s lack of guidance over future interest rate moves could result in
\nhigher risk aversion despite this dovish stance. In the L\/S Equity space, we maintain
\nour strong preference for market neutral and variable bias strategies. Some
\nmanagers in that space have delivered double-digit returns year to date and we
\nexpect this trend to continue.<\/p>\n