{"id":72171,"date":"2018-06-12T01:50:00","date_gmt":"2018-06-11T23:50:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/strategie\/stockpicking-strategies-remain-in-the-driving-seat\/"},"modified":"2020-01-01T22:22:54","modified_gmt":"2020-01-01T21:22:54","slug":"stockpicking-strategies-remain-in-the-driving-seat","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/strategie\/stockpicking-strategies-remain-in-the-driving-seat\/","title":{"rendered":"Stockpicking strategies remain in the driving seat"},"content":{"rendered":"

Market developments in May saw some trend reversals across the fixed income and commodity space. On
\nthe one hand, the unfolding of the Italian political crisis coincided with a rebound of U.S. Treasuries during
\nthe second half of May. On the other hand, the rising likelihood that OPEC and Russia will raise oil output
\nunder the pressure of the U.S. administration led to a reversal in oil prices.
\nBoth developments hurt the
\nperformance of Macro and CTA strategies, which had built up short positions on Treasuries and long positions
\non oil over the recent quarters.<\/quote><\/p>\n

On a positive note, bottom up strategies (Event-Driven\/ L\/S Equity) have fared relatively better.<\/strong> They were
\nup lately despite turbulent market conditions in Europe and to a lower extent in Japan. L\/S Equity funds were
\nmore resilient thanks to their strong allocations to cyclical sectors such as IT and Materials and Industrials
\nwhich outperformed. Meanwhile, their reduced exposures to financials, communications, and energy were
\nalso rewarding due to their underperformance.
\nOn the Event-Driven side, long exposures to stocks such as
\nTiffany & Co. and Facebook generated substantial returns for special situations funds, while merger arbitrage
\nstrategies benefitted from the spread compression on the Qualcomm vs. NXP deal. More recently, the bidding
\nwar for Sky between Fox and Comcast was also supportive.<\/quote><\/p>\n

Going forward, we maintain a preference for stockpicking strategies.<\/strong> L\/S Equity appears well equipped to
\nnavigate turbulent markets and we have a strong preference for strategies with a variable bias that can adjust
\ntheir net exposure to fast changing market conditions. Meanwhile, we maintain strong convictions on Merger
\nArbitrage, in the context of the U.S. fiscal reform and skyrocketing M&A activity in 2018. Overall, monetary
\ntightening and the rise in bond yields have pushed higher the dispersion across stock returns both in the euro
\narea and the U.S. which should prove supportive for hedge fund strategies focused on stock selection. <\/p>\n

\"higher_dispersion_across_stock_returns_supports_strategies_focused_on_stock_selection.jpg\"<\/a>