Puttin’ on the Ritz … With Open Protocol
View Jim’s Paper Hedge funds and other multi-asset class (MAC) strategies with long and short exposures are a tough act to follow…at least for many fiduciaries investing in these strategies. To showcase their portfolios, managers often use a proprietary language that fits their unique strategy. Unfortunately, they then don’t sound like each other, making one […]
Hedge Funds Grind Ahead Amid Tightening Liquidity
The market environment for hedge funds offered conflicting signals in the third quarter. Despite weakening economic strength abroad, particularly in China, the U.S. economy marched stridently ahead, still energized by recent tax cuts and falling unemployment. Better-than-expected corporate earnings pushed up U.S. stocks, despite a marginally stronger dollar. Anticipating inflationary risks, the Federal Reserve pressed […]
Trade Spat Rains on Risk Parade
After celebrating U.S. tax cuts and deficit spending in the prior quarter, risk seekers tempered their buying enthusiasm in the second quarter when a global trade war threatened to crash the party. Casting shade on the growing but increasingly fragile global recovery, Trump’s posturing against China and other countries with U.S. trade surpluses caused non-U.S. […]
Dragnets of Due Diligence
The often mundane jobs of compliance officers and forensic auditors just got more exciting. Effective Oct. 1, 2017, investment advisers registered with the Securities and Exchange Commission (SEC), with few exceptions, must use a newly expanded Form ADV to report on their businesses. With these changes, this document has become an even more valuable tool for investors and fiduciaries seeking to evaluate their advisers.
Boy – That Escalated Quickly!
The market narrative of strong corporate earnings, falling unemployment, and tax reform had pumped up expectations for risk assets heading into 2018. However, hints that an overheated U.S. economy may be unable to absorb significant fiscal stimulus ahead spooked markets in the first quarter, leading to a spasm of risk-off behaviors. Despite the quarter’s rocky […]
Risk Takers See Less as More
While raw equity beta surged, hedge funds experienced positive but more modest results. Representing a paper portfolio of hedge fund interests without implementation costs, the Credit Suisse Hedge Fund Index (CS HFI) rose 2.3% in the fourth quarter. The median manager in the Callan Hedge Fund-of-Funds Database advanced 1.5%, net of all fees and expenses.
Hedge Fund Outlook for 2018–No Grit, No Pearl
View PDF With equity prices still near historic highs, now is an appropriate time to take stock of the world’s capital markets and consider the outlook for hedge funds. Should investors buy, sell—or hedge? In this post I provide a framework for developing current return expectations and determining the appeal of a hedge fund allocation. […]
Kickin’ It with Risk
View PDF As MAD magazine’s Alfred E. Neuman proclaims, “What, Me Worry?” In the third quarter, global markets fully embraced that fearless mantra. And why not? Discarding past worries of stubbornly slow economic growth and other trifling distractions, markets focused on positive catalysts suggesting rising prices ahead. Corporate earnings worldwide enjoyed a notable uptick. Shrinking ranks of […]
Uncertainty Beyond the Next Eclipse
Unlike the laws of physics driving our solar system, our financial markets can surprise investors with moments of darkness.
As the World Churns, Despacito
View PDF Stock lovers embraced the slowly shifting narrative of global growth in the second quarter. Although hopes of a Trump bump faded further in the U.S. amid distracting Beltway theatrics, U.S. corporate profits remained resilient and credit spreads tightened modestly. Exhibiting little evidence of angst, the S&P 500 Index gained 3.1% while the Bloomberg […]