Lyxor Asset Management: Last week mixed for hedge funds
06 August 2018 London
Image: Shutterstock
Last week saw a mixed result for hedge funds, according to the latest weekly report published by the cross-asset research team at Lyxor Asset Management.
Senior strategist, Jean-Baptiste Berthon, who wrote the report, found commodity trading advisors (CTAs) were down, hit in their long EU bonds and long energy exposures.
Long-short (L/S) equity and special situation strategies suffered from unstable sector leadership and momentum.
Looking at the markets more broadly, Lyxor found risk-on markets bolstered hedge fund returns in July, with L/S equity strategies outperforming.
However, the reversal in growth stocks, due to the tech reversal at the end of the period eroded some of the previous gains. Market-neutral managers ended the month flat as a result.
CTAs were volatile in July making the most from rising equity markets and higher treasury yields.
Event-driven strategies were caught off guard by US-China trade tensions, in particular through the NXP/Qualcomm deal, said the researchers.
Alternative undertakings for UCITS strategies continued to attract investors in June, said Lyxor, but at a slowing pace, with €1.38 billion of net inflows.
The slowdown in the flow’s pace reflects a shift in investors’ positioning across strategies.
In June, market players withdrew their investments from multi- strategy and fixed income, two strategies that gather two thirds of alternative UCITS’s total assets under management.
Nonetheless, the alternative UCITS industry has remained attractive this year so far.
With €21.9 billion of net inflows year-to-date, the industry’s total net assets reached €399 billion.
This suggested that the quest for diversification and risk mitigation remains center stage in portfolio allocations amidst multiple uncertainties.
In the second quarter of the year, investors shifted their positioning across alternative UCITS strategies, said Lyxor. Inflows sharply accelerated within market-neutral strategies.
In June, the strategy enjoyed its biggest monthly inflows since March 2016 (€1.4 billion).
Additionally, investors have piled into L/S equity strategies since May, with growing appetite for US funds (plus €720 million in Q2).
Rising equity markets and strong earnings season in the US remained supportive for fundamental stock pickers. Inflows towards European managers remained steady (plus €761 million).
By contrast, investors stepped out from fixed income and multi-strategy funds in the second quarter. CTAs were disregarded in June, amidst mixed trend following conditions, concluded the Lyxor team.
Senior strategist, Jean-Baptiste Berthon, who wrote the report, found commodity trading advisors (CTAs) were down, hit in their long EU bonds and long energy exposures.
Long-short (L/S) equity and special situation strategies suffered from unstable sector leadership and momentum.
Looking at the markets more broadly, Lyxor found risk-on markets bolstered hedge fund returns in July, with L/S equity strategies outperforming.
However, the reversal in growth stocks, due to the tech reversal at the end of the period eroded some of the previous gains. Market-neutral managers ended the month flat as a result.
CTAs were volatile in July making the most from rising equity markets and higher treasury yields.
Event-driven strategies were caught off guard by US-China trade tensions, in particular through the NXP/Qualcomm deal, said the researchers.
Alternative undertakings for UCITS strategies continued to attract investors in June, said Lyxor, but at a slowing pace, with €1.38 billion of net inflows.
The slowdown in the flow’s pace reflects a shift in investors’ positioning across strategies.
In June, market players withdrew their investments from multi- strategy and fixed income, two strategies that gather two thirds of alternative UCITS’s total assets under management.
Nonetheless, the alternative UCITS industry has remained attractive this year so far.
With €21.9 billion of net inflows year-to-date, the industry’s total net assets reached €399 billion.
This suggested that the quest for diversification and risk mitigation remains center stage in portfolio allocations amidst multiple uncertainties.
In the second quarter of the year, investors shifted their positioning across alternative UCITS strategies, said Lyxor. Inflows sharply accelerated within market-neutral strategies.
In June, the strategy enjoyed its biggest monthly inflows since March 2016 (€1.4 billion).
Additionally, investors have piled into L/S equity strategies since May, with growing appetite for US funds (plus €720 million in Q2).
Rising equity markets and strong earnings season in the US remained supportive for fundamental stock pickers. Inflows towards European managers remained steady (plus €761 million).
By contrast, investors stepped out from fixed income and multi-strategy funds in the second quarter. CTAs were disregarded in June, amidst mixed trend following conditions, concluded the Lyxor team.
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