20 Oct 2011
Man group provide a monthly update on market conditions.
There was no quiet part of the investment landscape in September with wild inter-month swings posing severe challenges for investment managers, but again hedge funds outperformed equity markets, albeit still making a loss on average. With the MSCI World Index ending the month down -8.6%, by comparison the HFRI Fund of Funds Composite Index was off -2.8%.
Managed futures and global macro styles generally held up well, while equity hedged managers continued to struggle, but protected capital well compared to movements in global equity markets. For equity hedged, those that outperformed generally ran reduced grows exposures or tactically managed their net short exposure.
Market sentiment remained fragile as investors grew increasingly nervous against the deteriorating global economic backdrop. Disappointing economic indicators pointed to a sluggish recovery in the US and the growing possibility of a hard-landing for emerging markets, especially China. The failure of politicians to reassure the markets about the on-going sovereign debt crisis in the Eurozone further dampened confidence.
Bonds benefitted from uncertainty as investors flew to safety and the Fed’s ‘Operation Twist’ also contributed here, particularly to the rally in longer dated Treasuries. But not all ‘safe haven’ assets performed were. Most notable were precious metals; gold prices pulled back -11% as investors moved to cash to cover losses elsewhere and silver was down -28%.
There was no quiet part of the investment landscape in September with wild inter-month swings posing severe challenges for investment managers, but again hedge funds outperformed equity markets, albeit still making a loss on average. With the MSCI World Index ending the month down -8.6%, by comparison the HFRI Fund of Funds Composite Index was off -2.8%.
Managed futures and global macro styles generally held up well, while equity hedged managers continued to struggle, but protected capital well compared to movements in global equity markets. For equity hedged, those that outperformed generally ran reduced grows exposures or tactically managed their net short exposure.
Market sentiment remained fragile as investors grew increasingly nervous against the deteriorating global economic backdrop. Disappointing economic indicators pointed to a sluggish recovery in the US and the growing possibility of a hard-landing for emerging markets, especially China. The failure of politicians to reassure the markets about the on-going sovereign debt crisis in the Eurozone further dampened confidence.
Bonds benefitted from uncertainty as investors flew to safety and the Fed’s ‘Operation Twist’ also contributed here, particularly to the rally in longer dated Treasuries. But not all ‘safe haven’ assets performed were. Most notable were precious metals; gold prices pulled back -11% as investors moved to cash to cover losses elsewhere and silver was down -28%.
