Browsing: Hedge Fund Strategies

Hedge Fund Strategies

Hedge Funds are Still Relevant in a Diversified Portfolio: 4 Fundamental Criteria for Superior Manager Selection

May 25th, 2016 | Filed under: Asset allocation, Asset Allocation Models, Hedge Fund Industry Trends, Hedge Fund Strategies, Hedge Funds, Newly Added

By Appomattox Advisory, Inc. The discussion has revived again:  are hedge funds still relevant in a diversified portfolio? We believe that a thoughtful allocation to hedge funds continues to be an impactful, prudent and profitable strategy for institutional portfolios. For allocators seeking to achieve stable returns in a difficult investing environment,Read More


Tricky Times for Hedge Funds and a Lot of Negative YTD Performances

May 22nd, 2016 | Filed under: Benchmarking & Performance Attribution, Equity Hedge Funds, Fees, Hedge Fund Strategies, Hedge Funds, Indexes, Newly Added, Performance, Analytics & Metrics, Structure of the Hedge Funds Industry

A slim majority of hedge fund managers are in the red year to date, through April, according to the latest report from Eurekahedge. Specifically, 51.4% of managers have negative YTD performance. Over the same period in 2015, the analogous number was only 21.2%. That is a good indication of whatRead More


Convertibles as a Risk Management Tool in Emerging Markets Portfolios

May 2nd, 2016 | Filed under: Hedge Fund Strategies, Hedge Funds, Newly Added

By Nick Niziolek, CFA In a recent post titled The Convertible Bond Trifecta, my colleague Scott Henderson outlined several market factors that appear supportive of convertible bonds after the volatility that started 2016. This post addresses a different role for convertibles: their use as a risk management tool within portfoliosRead More


March Improved, but 2016 Still Rains Red for Hedge Funds

Apr 24th, 2016 | Filed under: Allocating to A.I., Alpha & Beta, Benchmarking & Performance Attribution, Equity Hedge Funds, Hedge Fund Industry Trends, Hedge Fund Strategies, Hedge Funds, Newly Added

The latest report from Eurekahedge indicates that hedge funds worldwide gained in March, though by far less than the underlying markets gained during the same period. Specifically, the Eurekahedge Hedge Fund Index gained 1.33 percent over the month, while the MSCI World Index, representing those underlying markets, gained 5.47 percent.Read More


Swaps Accounting: FVA as a Flawed Convention

Mar 15th, 2016 | Filed under: Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Newly Added, Regulatory, Regulatory Environment, The A.I. Industry

Leif Anderson, co-head of the global quant group at Bank of America Merrill Lynch, and two co-authors have prepared a draft of a paper that appears to identify an important error in the conventions for adjustments that derivatives dealers make to the disclosed valuations of their swap books.  It soundsRead More


Strategy Idea: Short Sell High-DTC Stocks, Go Long Low-DTC Stocks

Mar 6th, 2016 | Filed under: Alpha Strategies, Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Newly Added, The A.I. Industry

A recent paper correlating days-to-cover with stock returns finds a DTC premium effect and suggests that hedge funds might want to arbitrage it. This study begins with the crowded trade problem. With so many sophisticated investors in the markets, looking for or at the same arb opportunities, a number ofRead More


Gamma Trading: Why Big Market Swings Can Be Good News

Feb 17th, 2016 | Filed under: Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Newly Added

By Jason Hill, SVP and David O’Donohue, VP, Calamos Investments When it comes to your investment portfolio, volatility can be an unsettling word. For strategies that utilize convertible arbitrage though, market volatility can be a welcomed phenomenon, as we may be able to profit from it through what is referredRead More


DB Global Prime: Hedge Funds See Steady Combined Inflows, But Lots of Action

Nov 29th, 2015 | Filed under: Asset Managers, Benchmarking & Performance Attribution, Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Industry Size & Managers, Newly Added, Performance, Analytics & Metrics, The A.I. Industry

DB Prime's researchers have highlighted the multi-year outflows from EM to DM. EM equity inflows in particular reached a peak in early 2011. Since then EM equities have seen an outflow which has benefitted primarily Europe and Japan within the developed world. Read More


SWFs under Pressure: No Panic Selling Yet

Sep 15th, 2015 | Filed under: Alpha Strategies, Hedge Fund Strategies, Institutional Investing

Sovereigns and their politicians are looking over the shoulders of the managers of their sovereign wealth funds. This is a pain in the neck for the latter, but it may mean opportunity for their counterparties. Read More


Supreme Court Decisions: Post-Announcement Hours & Days

Sep 10th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, CAPM / Alpha Theory, Hedge Fund Strategies, Legislation/Court rulings

Presumably the U.S. Supreme Court's decision, in December 2008, that states can in fact make and enforce tougher labeling standards for cigarettes than does the federal government was a negative for tobacco stocks. But did that mean that stock prices had already anticipated the decision before it happened? or that they immediately adjusted downward on the morning the decision was announced? Or ... neither of those? Read More


The Skorina Report: Fearless Forecast Says That Endowment Returns Will Disappoint in FY2015

Sep 3rd, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Endowments & Foundations, Hedge Fund Strategies, Institutional Investing, Performance, Analytics & Metrics

Guest columnist Charles Skorina looks at the potential for 2016 endowment returns and finds them to be somewhat lacking... Could alternatives ride to the rescue?Read More


Foundations: They’ve Taken a Blow from “Subdued” Markets

Sep 2nd, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes, Institutional Investing, Liquid Alts, Performance, Analytics & Metrics, Risk management

Both private and community foundations depend heavily on U.S. equities. Indeed, domestic equities remained the bright spot while other strategies underperformed in 2014. A new report from a collaboration of the Council on Foundations and Commonfund provides food for thought about the reversal in foundation returns in that year. TheRead More


Administration, via Verrelli, Rolls the Dice on Insider Trading Issue

Aug 31st, 2015 | Filed under: Alpha Hunters, Hedge Fund Strategies, Legislation/Court rulings

Not all benefits are as tangible as a suitcase of cash, and the question of law for the Second Circuit, for the Ninth, and now perhaps for SCOTUS is: is friendship enough? how about regard for one's brother? Read More


Hedge Fund Assets to Increase a Quarter Trillion Dollars by Summer of 2016

Aug 19th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Media Coverage of Hedge Funds

Guest columnist Don Steinbrugge on why hedge fund AUM is set for an increase over the course of the next 12 months.Read More


Eurekahedge: The Markets are Reading the Headlines

Aug 18th, 2015 | Filed under: Alpha Seekers, Alpha Strategies, Commodities, CTA, Currencies, Hedge Fund Strategies

In the three month period that ends with July, Eurekahedge’s Greater China Index (which has 85 constituents) is down 9.39%. That has come about for precisely the reasons that a reader of the pertinent headlines would guess. Read More


Event-Driven Hedge Funds Rescued by Obamacare

Aug 11th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

Obamacare's impact on the investment world may have been mitigated until very recently by the protracted and complicated litigation that the law immediately generated starting with its enactment in 2010. But now.... Read More


The Strength of Multi-Strat Is No Mystery

Aug 2nd, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

Credit Suisse Capital Services says that appetite has increased of late, among institutional investors, for multistrategy funds. Faille offers some thoughts as to why. Read More


Crisis? Tempted to Flee to Shelter of Big Funds? Bad Idea

Jul 29th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Behavioral finance, CAPM / Alpha Theory, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

The authors of a new study of the relationship between fund size and performance employ a database consisting of 7,261 funds and their performance over a twenty year period (1994 to 2014). Spoiler alert: size is bad. Especially in a crisis.Read More


Alternative Investments By the Numbers: Top 5 2015 YTD Takeaways

Jul 23rd, 2015 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Liquid Alts, Performance, Analytics & Metrics, Private Equity

Guest columnist Andre Boreas takes a look at the alternative investment universe year-to-date 2015 by the numbers.Read More


Delivering Alpha Highlights: Part Two

Jul 20th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Strategies

Low interest rates and record equity valuations together mean that companies can use either stock swaps or borrowed cash or a combination of the two, to buy one another. Further, corporate executives infer that they have to keep buying in order not to become a target themselves. Read More


PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers

Jul 5th, 2015 | Filed under: Emerging markets, Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Technology

PwC offers a glimpse of a 'day in the life' of a typical compliance analyst in 2015 and again in 2020. As these authors tell it, the day is filled with data, darkness, and drudgery at present, but it will be airy, alliterative, and analytical in another five years. Read More


Spoofing: The ‘It’ Enforcement Action

Jun 17th, 2015 | Filed under: Algorithmic and high-frequency trading, Derivatives, Hedge Fund Strategies, Regulatory, Technology

Spoofing is probably about as ubiquitous as texting-while-driving. And it is possible to make an example of a spoofer caught red-handed. But it isn't clear what purpose that will serve. The real problem is that a broken market contains a broken set of incentives. Read More


Activism: Why the Short-termers Can Be Right

Jun 15th, 2015 | Filed under: Hedge Fund Strategies, Media Coverage of Hedge Funds

Much of the ubiquitous talk of the short-sightedness of nasty activist investors or traders is simply confused, analytically sloppy. It is a sort of confusion likely to have negative consequences to the extent that investors/traders themselves come to take it seriously. Read More


Are CTAs mumbo jumbo or additive for a diversified hedge fund portfolio?

Jun 9th, 2015 | Filed under: Commodities, Hedge Fund Industry Trends, Hedge Fund Strategies

Guest columnist Don Steinbrugge looks at the value of trend-following CTAs in a portfolio.Read More


Top Hedge Fund Managers: They Aren’t Wizards, but They Are Masters

May 28th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Real Estate

For Faille, the stand-out essay in this collection of case studies, from CNBC's Maneet Ahuja, concerns Marc Lasry and Sonia Gardner, of the Avenue Capital Group. As Myron Scholes says in his afterword to this volume, Lasry and Gardner take returns from those whose demand for liquidity makes them willing to give them up. Read More


Eurekahedge on Funds of Hedge Funds: A Downward Spiral

May 27th, 2015 | Filed under: Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies

A new report by Eurekahedge says that the rise of new products such as hedge fund trackers and related developments since the global financial crisis have set the fund of funds world into a downward spiral whence it has yet to recover. Read More


If I Can’t Call It a Hedge Fund, What AM I Going to Call It?

May 18th, 2015 | Filed under: Alpha Hunters, Hedge Fund Strategies

Intrepid contributor Doug Friedenberg addresses a burning nomenclatural issue for the investment style formerly known as hedge funds and proposes a solution to save the financial system.Read More


The STOCK Act Was Just For Show: Looking at the Inside of Insider Trading

May 17th, 2015 | Filed under: Hedge Fund Strategies, Legislation/Court rulings

What about the Congressionally employed leaker in a matter that looks like an insider tip to hedge fund traders? Is the SEC even allowed to ask? Shockingly, Congress wants special treatment for itself and its staff. Read More


What Happens When You Pick A Fight With Activist Hedge Funds

May 12th, 2015 | Filed under: Alpha Strategies, Hedge Fund Strategies, Media Coverage of Hedge Funds

The tear-jerker ending to a famous Broadway musical comes to Faille's mind as he contemplates the latest twist in the struggle over DuPont's board. Read More


AIMA: Debt Funds Filling a Need in Europe, UK and US

May 11th, 2015 | Filed under: Alpha Strategies, Hedge Fund Strategies, Insolvency

A new survey from AIMA seems designed to dispel the idea that alternative finance is a game played somewhere far away from the 'real economy.' The gist of it is that as banks withdraw from lending to that real economy, alternative asset managers, including hedge funds, have stepped in to fill the void. Read More


The Forrest or the HFTrees? ‘Preferred Data Customers’

May 7th, 2015 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Legislation/Court rulings

It is of course possible to “question the wisdom of the SEC’s stance on this issue and its fairness to ordinary investors,” said the Judge in the Lanier/HFT decision. But the court isn’t in the business of second guessing the wisdom of regulation. Lanier's claims are dismissed. Read More


Eurekahedge on Asia in March, and on Asia Over the Years

Apr 28th, 2015 | Filed under: Currencies, Emerging markets, Hedge Fund Strategies, Indexes, Performance, Analytics & Metrics

According to Eurekahedge the hedge fund industry globally returned $54.1 billion in performance gains in the first quarter 2015. This is the greatest first-quarter gain since before the global financial crisis. Read More


When I Learned Truth About RadioShack

Apr 13th, 2015 | Filed under: Hedge Fund Strategies, Insolvency, Technology

IT guys have been denigrating RadioShack, from their own perch of superiority, for a long time. The trouble is, while those IT guys were the future, RadioShack's customer base was fading into the past. Read More


Liquidity, Leverage and Those Nimble Hedge Funds

Apr 9th, 2015 | Filed under: Derivatives, Hedge Fund Strategies, Regulatory, Risk management

Basel III has given us three different statistics with a common goal, to keep banks to a stable funding profile, neither too illiquid nor too highly leveraged. As these requirements come on-line, what will be the consequences for the relationship between prime brokers and hedge fund managers? Read More


Does the hedge fund industry benefit society?

Mar 30th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Strategies, Media Coverage of Hedge Funds

Guest columnist Donald Steinbrugge, CFA, looks at the bad rap hedge funds have gotten and talks about why it's not deserved.Read More


Hedge Fund Investors and Managers: Concord and Discord

Mar 29th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Hedge Fund Strategies, Institutional Investing

Investors in hedge funds want more transparency than they think they're getting, a fact that might not be clear to their managers. Read More


A Taylor-Swift Lawsuit: ‘I’ve Got a Blank Space Baby.’

Mar 26th, 2015 | Filed under: Algorithmic and high-frequency trading, Derivatives, Hedge Fund Strategies, Technology

This is the story of one high-frequency trading firm suing one or more others and giving detailed credence to everything that has been said over the last year or so by those who bemoan the rise of HFT firms. Read More


KPMG, MFA & AIMA: Institutional Investors & Customization

Mar 19th, 2015 | Filed under: Alternative Mutual Funds, Asset allocation, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Liability Driven Investing, Regulatory

Surveys suggest that certain conspicuous ongoing trends will continue. For example, the classic 20 + 2 fee structure will continue to crumble, replaced by "customized" structures. A full 91% of the small hedge fund managers who filled out a survey agreed with this. A mere 76% of large hedge fund managers did likewise. Read More


A Defeat, but Not a Rout, for Appraisal Arb

Mar 17th, 2015 | Filed under: Alpha Strategies, Hedge Fund Strategies, Legislation/Court rulings

The Delaware Chancery Court would apparently have preferred to stay out of the issue of valuation as it played itself out in the 2012 acquisition of Ancestry.com by Permira. But it couldn't: the statute encouraging appraisal fights was too clearly worded for that. Read More


5 Insights on a Hedge Fund Outlook

Mar 12th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

Guest columnist Diane Harrison finds five trends in hedge funds that are worth watching.Read More


Why Constraints on Hedge Funds Matter

Mar 8th, 2015 | Filed under: Alpha Strategies, Alternative Mutual Funds, Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes, Performance, Analytics & Metrics

Andrew Beer looks at what happens when talented hedge fund managers try and perform within the constraints of the mutual fund structure. Read More


AIMA Reports: Activist Hedge Funds are the Good Guys

Mar 3rd, 2015 | Filed under: Hedge Fund Strategies, Private Equity, Regulatory

Activist investors usually aren't trying to take control of a company. And when they are, managers have strong existing tools to foil them. What activist investors can do is increase share value, over sustained periods.Read More


Do you like or dislike equity?

Mar 1st, 2015 | Filed under: Hedge Fund Strategies, Liquid Alts

John Shearman, CAIA, guest columnist explores the basics of liquid alts.Read More


A Metaphorical Map that Proposes an Unbound Barbell

Feb 12th, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Alternative Beta & Hedge Fund Replication, Alternative Mutual Funds, Asset allocation, Hedge Fund Strategies, Liquid Alts, Risk management

The hedge fund universe has become a much more complicated place since 2008. The old-school hedge funds offering only quarterly redemptions with at least one month notice are no longer the only option for those seeking alternatives plays. And those who are seeking such plays may be somewhat confused by the proliferation of possibilities. Read More


Arbitrage 101: When Voting Has Negative Value

Feb 11th, 2015 | Filed under: Hedge Fund Strategies, Performance, Analytics & Metrics

Reuters is now reporting that major investors seek the opportunity to convert their voting shares of Twenty-First Century Fox into non-voting shares, because the voting shares are trading at a discount. Faille takes Reuters' anonymous sources at their words for the purposes of discussion. He doesn't think these investors will get their convertibility. Read More


Recent Russian Investment History: Misty Water-Colored Memories

Feb 8th, 2015 | Filed under: Emerging markets, Frontier markets, Hedge Fund Strategies

William Browder's new book, Red Notice, is a fascinating window into the recent history of Russia, both when Yeltsin (and at first Putin) welcomed foreign investment and then when things turned very ugly for those investors. Read More


Should Governments Slow Trading Down by Taxing It?

Feb 5th, 2015 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Regulatory, Technology

A physicist recently suggested that exchanges might do well to change the nature of the trading they host, holding batch auctions every one-hundredth of a second to better serve their real economic functions. Then a commenter proposed that taxation could achieve the same effect. Our physicist went back to the drawing board to consider this. Read More


Stifling Debate on Classified Boards: Je Suis Charlie!

Feb 2nd, 2015 | Filed under: Hedge Fund Strategies, Regulatory

Unfortunately, Gallagher and Grundfest aren't simply contributing to the on-going debate over shareholder activism, classified boards, etc. They're trying to stifle it by suggesting a litigation campaign against the side they oppose. Shame on them. Read More


Low Energy Prices: Crude and Refined Consequences

Jan 21st, 2015 | Filed under: Currencies, Hedge Fund Industry Trends, Hedge Fund Strategies, Indexes

Eurekahedge tells us that hedge funds were in the black 4.57% in 2014. That's hardly cause for celebration, since the MSCI World Index returned 6.79% over the same year. But all eyes now turn to the still-sliding price of oil. Read More


The Quant Conundrum: Perfectly Repeatable or Repeatedly Imperfect?

Jan 15th, 2015 | Filed under: Algorithmic and high-frequency trading, Alpha Seekers, Hedge Fund Strategies, Risk management

Guest columnist Diane Harrison looks at both sides of the quantitative investment debate.Read More