{"id":80560,"date":"2019-06-13T08:12:50","date_gmt":"2019-06-13T06:12:50","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/em-macro-strategies-benefit-from-the-fed-tailwind\/"},"modified":"2020-01-02T22:09:15","modified_gmt":"2020-01-02T21:09:15","slug":"em-macro-strategies-benefit-from-the-fed-tailwind","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/em-macro-strategies-benefit-from-the-fed-tailwind\/","title":{"rendered":"EM Macro strategies benefit from the fed tailwind"},"content":{"rendered":"

Last week Lyxor Cross Asset Research team addressed the positive performance of CTA strategies during the
\nmarket downturn, which started a few weeks ago and dragged global equities nearly -6% lower in May. This fact is
\nnonetheless debatable since other benchmarks, such as the SG Trend Index, have reported a negative
\nperformance in May.<\/p>\n

EM-focused Global Macro strategies also outperformed other hedge fund strategies since the beginning of the
\nmarket turmoil. They managed to deliver slightly positive returns in May according to the Lyxor UCITS Peer Group.<\/p>\n

Our views on EM-focused Global Macro strategies has been constructive (Overweight) during the last quarter.
\nThey reflect our stance on EM Sovereign Credit, which assumes that sovereign bond yields would remain low for
\nlonger in developed markets and higher yielding assets such as High Yield and EM Credit would be attractive in
\nrelative terms. The accommodative stance on major central banks has proved to be supportive. EM Sovereign
\nBonds in hard currency have experienced six consecutive months in positive territory according to the EMBI Global
\nDiversified Index.<\/p>\n

Beyond the Fed tailwind for EM-Macro strategies, research on active vs. passive investing also shows that EM
\nFixed Income is the segment where active investing shows the best results. More than 48% of active managers
\noutperformed their benchmark on average between 2001 and 2018 (compared to only 33% in the U.S. fixed income
\nspace) according to S&P. Dispersion across EM issuers tends to be large and active investors who managed to
\navoid exposures to the usual suspects such as Argentina, Turkey and Venezuela were rewarded.<\/p>\n

Finally, with regards to hedge fund performance, most strategies were flat across the board at the turn of the month.<\/p>\n

L\/S Credit, Merger Arbitrage and Market Neutral L\/S were up +0.1% last week. Concurrently, Directional L\/S Equity
\nstrategies were down -0.2%. Markets were buoyed by the dovish stance of the Federal Reserve, as investors
\nexpect aggressive Fed rate cuts could offset the trade war headwind. During the period under review (May 28th to
\nJune 4th), the MSCI World was nonetheless down -0.5%.<\/p>\n

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