- Advertisement -
- Advertisement -

Related

The Early View: Plus Ça Change?

Industry Report

- Advertisement -

By Adam Singleton, CIO – Man FRM: Hedge fund managers have seen weak alpha generation so far this year as markets grapple with uncertainty about the impact of higher rates and geopolitical turmoil. Looking ahead, they may capitalise on greater dispersion and possible higher volatility.

Over the last few months markets have mangled the French aphorism; now it’s plus c’est la même chose, plus ça change. The last US rate rise was over three months ago now, and the fundamental data on inflation, jobs, growth etc has been devoid of shocks, but markets continue to display new levels of tolerance for this uncertain regime. US 10-year bond yields popped their heads briefly above 5% in late October, capping a full 1% rise over the last three months, and equity markets continued their recent downward trajectory: the MSCI World Index is down almost 10% in three months.

Single stock behaviour is similarly detached. The Q3 earnings season was broadly in line with expectations, but stock reactions post-earnings were much more often negative than positive. Outside of the banality of market data and price dynamics, geopolitics remain tragically messy. Risk premia are beginning to reflect the quickly deteriorating panorama across the Middle East, although currently these reflect possible negative future developments rather than a tangible negative impact on financial markets.

All of which points to a widening price of risk in markets right now, through real yields on nominal government bonds, credit spreads, and merger spreads. Throughout the investment landscape there is an increased premium for providing capital and liquidity and the challenge for hedge fund managers now is to capitalise on this alpha opportunity without suffering losses if the picture continues to deteriorate.

Read the full article here.

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Man Group
Man Grouphttp://www.man.com
Man Group is a global, technology-empowered active investment management firm focused on delivering alpha and portfolio solutions for clients. Headquartered in London, we manage $151.7 billion* and operate across multiple offices globally. *As at 30 June 2023.

Latest Articles

Nordic CTAs Feel the Jitters: May 2025 Review

In May 2025, the NHX CTA Index was down again as profits in rebounding stock markets were not enough to offset losses in fixed...

Borea Deal Sets Fund Boutique Valuation Benchmark

Frendegruppen – Norway’s second-largest banking partnership – announced about a year ago its agreement to acquire a majority stake in the Norwegian fund boutique...

From Macro to Trend: Volt’s Approach to Trend-Following

Patrik Säfvenblad, Jukka Harju, and the broader team at Volt Capital Management have successfully managed their fundamental systematic macro strategy since its launch in...

The Secret Behind Mandatum’s Managed Futures Strategy

2024 has been a mixed but generally challenging year for trend-following strategies. The early months of 2025, particularly March and April, have been equally, if...

Turning a Time Zone Constraint into a Truly Diversified Systematic Portfolio

Many hedge funds aim to deliver truly uncorrelated and consistent returns to investors. A team based in Australia – partly motivated by the time...

Honey, you Shrunk the Skew

By Linus Nilsson, Head of Systematic Strategies at Tidan Capital: One of the mythical qualities of a trend-based strategy is that it is a...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.