San Francisco Recap: Will “tectonic shifts” in the global economy finally give emerging markets hedge funds a chance to earn some alpha?
May 14th, 2009 | Filed under: Featured Post, Today's Post
Much of this three-day “no media” conference in San Francisco focused on the “tectonic shifts” going on the global economy (Day 1, Day 2). Unlike previous versions of this particular conference, this new left-coast edition featured several economists specializing in the global economy – particularly in Asian economies. From Nobel Laureate Michael Spence (chairman of the Independent Commission on Growth and Development) to academic and author Richard Koo (author of a recent book on what the US can learn from Japan’s lost decade) to this morning’s opening speaker Stephen Krasner, former Director for Governance and Development at the National Security Council.
As much as these macro-economic issues seemed to engage the sensibilities of the hedge fund managers and institutional investors in the room, one question was never far from the surface: so what? How would these “tectonic shifts” affect the investment portfolios of the foundations, endowments, pensions, insurance companies and hedge funds who make the pilgrimage to Boston and San Francisco every six months for this gathering?
One obvious answer is that these macroeconomic dislocations could lead to opportunities for global macro, currency and emerging markets hedge funds. But a recent research note from Vanguard shows that emerging markets may still be all about beta, not all about alpha.
The category of “emerging markets hedge fund” has always seemed a little odd to us. Obviously, this category has a serious long-bias. Check out Vanguard’s chart below showing the correlation between “emerging market hedge funds” and the MSCI emerging market index: More…
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