{"id":57919,"date":"2016-11-08T00:46:50","date_gmt":"2016-11-07T23:46:50","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/hedge-funds-show-resilience-ahead-of-election-day\/"},"modified":"2019-12-31T01:14:49","modified_gmt":"2019-12-31T00:14:49","slug":"hedge-funds-show-resilience-ahead-of-election-day","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/hedge-funds-show-resilience-ahead-of-election-day\/","title":{"rendered":"Hedge Funds Show Resilience Ahead of Election Day"},"content":{"rendered":"<p>This market environment has proved difficult to navigate for hedge funds, considering the<br \/>\npositive correlation between equities and bonds. However, on balance, they proved to be<br \/>\nrelatively resilient. The Lyxor Hedge Fund index was down 1% last week. Long term CTAs<br \/>\nsuffered a drawdown on the back of their long equity and long fixed income positions. Their<br \/>\nlong energy positions also proved harmful. Global Macro managers delivered negative<br \/>\nreturns on the back of their short EUR vs. USD positions. Meanwhile, their short GBP vs.<br \/>\nUSD is at risk considering the change of tone of the Bank of England which is unlikely to<br \/>\nadopt additional expansionary measures.<\/p>\n<p><quote>Overall, all hedge fund strategies were in the red last week, however, fixed income<br \/>\narbitrage players outperformed. The best performing manager last week was a relative<br \/>\nvalue arbitrageur in the mortgage backed security space.<br \/>\nGoing forward, we stick to our investment recommendations which have performed well.<\/quote><\/p>\n<p>Our preference for short term CTAs versus long term ones has paid off. In the same vein,<br \/>\nour preference for merger arbitrage over special situations in Event-Driven has proved<br \/>\nbeneficial. Finally, our overweight stance on both market neutral L\/S Equity and relative<br \/>\nvalue\/fixed income arbitrage strategies has proved adequate. In relative terms, we prefer<br \/>\nEvent-Driven over L\/S Equity and keep both Macro and CTAs at neutral.<\/p>\n<p>Beyond U.S. Election Day, we believe that the Italian referendum early December has the<br \/>\npotential to cause market jitters. As a result we remain defensive in our investment<br \/>\nrecommendations for both traditional and alternative asset classes for the time being and<br \/>\nlook for attractive entry points in the near term to add risk in portfolios.<\/p>\n<p><a href=\"http:\/\/www.next-finance.net\/http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections.jpg\"><img loading=\"lazy\" class=\" aligncenter size-full wp-image-57904\" src=\"IMG\/jpg\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections.jpg\" alt=\"hedge_funds_go_on_the_defensive_ahead_of_u.s._elections.jpg\" align=\"center\" width=\"815\" height=\"336\" \/><\/a><div id='gallery-1' class='gallery galleryid-57919 gallery-columns-3 gallery-size-herald-lay-c1'><figure class='gallery-item'>\n\t\t\t<div class='gallery-icon landscape'>\n\t\t\t\t<a class=\"herald-popup\" href='http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections.jpg'><img width=\"470\" height=\"313\" src=\"http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections-470x313.jpg\" class=\"attachment-herald-lay-c1 size-herald-lay-c1\" alt=\"\" loading=\"lazy\" srcset=\"http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections-470x313.jpg 470w, http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections-300x200.jpg 300w, http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections-414x276.jpg 414w, http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections-130x86.jpg 130w, http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/11\/hedge_funds_go_on_the_defensive_ahead_of_u.s._elections-187x124.jpg 187w\" sizes=\"(max-width: 470px) 100vw, 470px\" \/><\/a>\n\t\t\t<\/div><\/figure>\n\t\t<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Risk aversion rose over the recent days as Election Day approaches in the U.S. and the<br \/>\ngap between Clinton and Trump in the polls has narrowed. During the period under review,<br \/>\nboth equities and bonds delivered negative returns, while credit spreads widened and<br \/>\nenergy commodities fell markedly.<\/p>\n","protected":false},"author":1,"featured_media":57904,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1470],"tags":[1809,1687,1743,1655,1723,1690,1657,1651,1662,2068,1672],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/57919"}],"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=57919"}],"version-history":[{"count":1,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/57919\/revisions"}],"predecessor-version":[{"id":57920,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/57919\/revisions\/57920"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/57904"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=57919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=57919"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=57919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}