![\"ctas_and_macro_managers_preparing_for_a_possible_u.s._yield_inflection.jpg\"](\"http:\/\/www.next-finance.net\/http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/08\/ctas_and_macro_managers_preparing_for_a_possible_u.s._yield_inflection.jpg\")
<\/a>The Lyxor Hedge Fund index was up a healthy +0.7% since the beginning of August, with
\nprogress in most strategies, supported by the positive performance of risky assets.<\/p>\n
The Bank of England\u2019s activism and the Brexit timeline getting pushed back contributed
\ntoward easing investors\u2019 fears. Meanwhile, a patient Fed kept the dollar and yields under
\npressure. Economic releases were mixed but evidenced the resilience of developed market
\nconsumers. <\/p>\n
Finally, the recovery in oil prices supported emerging markets assets and
\ncredit. While cautiousness remains elevated and trading volumes remain low, better asset
\nreturns lifted some pressure off investors\u2019 shoulders. Hedge funds\u2019 portfolios, which have
\nbeen substantially reshuffled since the UK referendum, also reflect a cautious addition of
\nrisk. Below, we highlight the most significant changes:<\/p>\n
Over the course of the summer, CTAs doubled their equity net exposure. They neutralized
\ntheir commodity positions, with longs in metals offset by shorts in energy and agricultural.
\nThey kept their dollar shorts and long Euro bonds, but reduced their long U.S. bonds.<\/p>\n
Macro funds remain mildly long equities (but short U.S. indices). They rebuilt relative trades
\nin precious metals and energy. They remained unanimously short U.S. bonds and long
\nUSD, especially vs. EUR and GBP. The most significant disparities can be found in
\nEuropean and Japanese positions.<\/p>\n
Event driven funds gradually increased risk. Merger funds raised exposure to European
\ndeals, and to the technology and communication sectors. Special Situation funds raised
\ntheir stakes in resources, consumer non-cyclical and technology.<\/p>\n
L\/S Equity funds mildly raised their exposures. U.S. managers reinforced their stakes in the
\nresources and financial sectors. Their European peers preferred the high yielding stocks.<\/p>\n
Japanese funds returned to financials amid receding prospects of negative rate policy.<\/p>\n
These portfolio changes emphasize both lower risk aversion and a persisting wait-and-see
\nstance. The decline in U.S. bonds positions is consistent with rising Fed concerns. <\/p>\n