Stone Mountain Research Perspective Vol. 50

April, 2017

After “flat” returns in March, hedge funds are still flat during the first two weeks of April. The only strategy struggling in this period is equity hedge, with US large-cap and mid-cap equities being flat and negative respectively. Event-driven and macro strategies lead so far the gains, with macro rebounding from a very bad March, finding themselves in negative territories year-to-date. Relative value and fixed-income strategies remain flat over the first weeks of April, with the FED deciding to reduce its balance sheet. The two major events that caught investor's attention were South Africa’s downgrade to “junk” status and the launch of missile attacks from the U.S. to Syria. With interesting times to come due to elections in Europe, portfolio diversification is the most important element for investors looking for downside protection in such unstable geopolitical and economic conditions. Finally, bitcoin was recognized by the Japanese government as a currency and its price returned to over $1200 levels.

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