{"id":75314,"date":"2018-11-20T01:12:00","date_gmt":"2018-11-20T00:12:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/strategie\/l-s-equity-strategies-bear-the-brunt-of-the-turmoil\/"},"modified":"2018-11-20T01:12:00","modified_gmt":"2018-11-20T00:12:00","slug":"l-s-equity-strategies-bear-the-brunt-of-the-turmoil","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/strategie\/l-s-equity-strategies-bear-the-brunt-of-the-turmoil\/","title":{"rendered":"L\/S Equity strategies bear the brunt of the turmoil"},"content":{"rendered":"<p>Following a sharp correction in risk assets for the second<br \/>\ntime this year, equity markets initiated a rebound by the end<br \/>\nof October.<\/p>\n<p>Initially caused by fears the U.S. economy was<br \/>\noverheating, the market later focused on profit warnings<br \/>\nduring the earnings season, especially when companies<br \/>\nreported cost pressures related to trade wars.<\/p>\n<p><quote>The selloff in October was difficult to navigate for hedge<br \/>\nfunds, but there were substantial divergences across<br \/>\nstrategies.<\/quote><\/p>\n<p>L\/S Equity and Event-Driven strategies underperformed<br \/>\ndue to their elevated market beta. L\/S Equity strategies<br \/>\nalso suffered due to the rotation in risk factors which saw<br \/>\ngrowth\/ momentum stocks underperforming value and low beta stocks. Within Event-Driven, Special Situations<br \/>\nstrategies were especially hurt but Merger Arbitrage was resilient.<\/p>\n<p>On a positive note, L\/S Credit, Merger Arbitrage and Market Neutral L\/S strategies were highly resilient thanks<br \/>\nto their cautious positioning and low market beta. Global Macro strategies were also resilient, in several cases<br \/>\nthanks to short positioning on equities.<\/p>\n<p>Going forward, we believe that market concerns are overdone and expect the market rebound to consolidate.<\/p>\n<p><quote>Over the medium term however, the growth deceleration in the U.S. coupled with monetary normalization suggest<br \/>\nthe volatility regime might remain elevated. Hence, low beta strategies such as Merger Arbitrage and Fixed<br \/>\nIncome Arbitrage remain highly attractive.<\/quote><br \/>\n On top of that, we also favor flexible L\/S Equity strategies that can<br \/>\nadjust their net exposure dynamically.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>L\/S Equity and Event-Driven strategies underperformed<br \/>\ndue to their elevated market beta. L\/S Equity strategies<br \/>\nalso suffered due to the rotation in risk factors which saw<br \/>\ngrowth\/ momentum stocks underperforming value and low beta stocks. <\/p>\n","protected":false},"author":1,"featured_media":75312,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1483],"tags":[1687,1743,1655,1723,1690,1651,1662,1650,2243,1672],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/75314"}],"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=75314"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/75314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/75312"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=75314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=75314"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=75314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}