Hedge Funds Thrive amid Surging Recovery
Jim McKee assesses hedge fund and MAC performance in 2Q21 and analyzes the outlook for these asset classes.
Damn the Shorts and Margin Calls, Full Risk Ahead
Emboldened by more injections of vaccines, central bank liquidity, and fiscal stimulus in 1Q21, investors’ risk appetites grew again.
Hedge Funds Vaccinated Against Risk
The vigorous but volatile market conditions fed by continuing central bank liquidity enabled healthy hedge fund profits from both alpha and beta.
How Hedge Funds and MACs Did in 4Q19
View PDF Twenty years ago, U.S. stock prices were hitting record highs with nosebleed valuations based on a strong economy supported by rising corporate earnings and increasing productivity. Treasury bills then were yielding almost 5% (or 2% real), as the Federal Reserve was slowly taking away the market’s punch bowl by raising rates. Meanwhile, a […]
Macro Shines; Equity Alpha Shaded
View PDF With fears of softening manufacturing hanging over global equity markets, particularly in Asia and Europe, many central banks actively cut rates to allay economic concerns in the third quarter. Falling yields for sovereign debt and higher-rated credits also helped to soothe concern about the prolonged trade battle between the U.S. and China. Regional […]
Hedge Funds Feed on Market’s Cognitive Dissonance
As the global economy slowed further in the second quarter, central banks aggressively talked of easing again. Although resilient consumer spending continued to support corporate earnings, company outlooks were less positive due to growing trade war concerns. Across the capital markets, the cognitive dissonance within the investor community trying to interpret these mixed economic signals […]
The Pause That Refreshes
At the end of last year, the Federal Reserve quickly pivoted from its longstanding tightening narrative to a pause. With the U.S. economy still strong but slowing, the Fed said it needed “some time” to decide whether to raise or lower rates next. For most capital markets, that pause was indeed refreshing, as an old Coke […]
Hot Markets Go Cold Turkey
In chilling markets, the mix of volatile prices and tightening liquidity became too hot for many hedge funds to handle. And beset by negative betas in both traditional and alternative markets, all of the Callan Multi-Asset Class (MAC) Style Groups struggled in the fourth quarter’s risk-off mode.
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. […]