Tag: BarclayHedge

BarclayHedge

Hedge Funds Suffer in October: BarclayHedge

Hedge Funds gave up 3.06% in October according to the Barclay Hedge Fund Index compiled by BarclayHedge, versus a 6.84% decrease in the S&P 500 Total Return Index. Year to date, the Barclay Hedge Fund Index is down 1.90%, while the S&P has gained 3.01%.
Overall, 16 of Barclay’s 17 hedge fund indices had losses in October, while only one index had a gain.
The Barclay Fund of Funds Index gave up 2.69% in October, and has moved into negative territory with a 2.34% loss for the year.

Unpredictable Trend Changes Drive CTA Losses in September

The flash estimate for the Barclay CTA Index, compiled by BarclayHedge, indicates a 0.19% loss in September. However, currency trading remains the best performing sector this year.

“The US economy continues to strengthen in spite of pervasive trade war fears and continued Fed monetary tightening, while other countries have chosen to keep their rates low,” says Sol Waksman, founder and president of BarclayHedge.

He adds: “These contradictory monetary policies have created unpredictable crosscurrents and trend changes in futures prices.”

Eight of Barclay’s managed futures indices had losses in September, while only one had a gain.

Hedge Fund Performance Edges Lower in September

Hedge Funds slipped 0.02% in September according to the Barclay Hedge Fund Index compiled by BarclayHedge, versus a 0.57% increase in the S&P 500 Total Return Index. Year to date, the Barclay Hedge Fund Index is up 1.25%, while the S&P has gained 10.57%.
“In spite of interest rates reaching multi-year highs, US equities were able to squeak out a modest profit,” says Sol Waksman, founder and president of BarclayHedge. “However, hedge fund returns were mixed. Winners and losers were evenly split.”

A New Breed of FX Hedge Fund

There is a new breed of hedge funds that are using artificial intelligence (AI) tools to trade the currency markets. Galen Stops takes a look at a few of these emerging funds.

“AI has become a catch-all phrase, everybody and their grandma wants to use it now because it’s a buzzword,” says Damien Loh, the CIO at Ensemble Capital, a Singapore-based hedge fund.

With an academic background in computer science, Loh spent 15 years at JP Morgan before launching Ensemble Capital in 2017 alongside Atsuo Ogaki, the former head of FX at Nomura in Tokyo and 22-year veteran of JP Morgan.

CTAs Register Slight Gains in August

The flash estimate for the Barclay CTA Index, compiled by BarclayHedge, indicates a 0.71% gain in August. Year-to-date, the Index has lost 1.43%.

“Downtrends in agricultural markets, precious metals, and emerging market currencies provided a helpful tailwind for the 70 percent of futures funds that reported a profit in August,” says Sol Waksman, founder and president of BarclayHedge.

Five of Barclay’s managed futures indices had gains in August, while four had losses.

The MPI Barclay Elite Systematic Traders Index enjoyed a 2.81% gain in August. Diversified traders were up up 1.21%, the Systematic Traders Index gained 1.10%, and currency traders added 0.35%.

Spring Time for Hedge Funds?

Hedge funds have been much maligned post-financial crisis due a perceived lack of performance. Is this criticism fair? And what is the prognosis for currency funds in particular? Galen Stops takes a look.

Earlier this year, Cliff Asness, founder, managing principal and CIO of AQR, published an excellent piece explaining why hedge fund returns should not be compared to 100% long equities returns, as they so often are when people use the S&P 500 as a benchmark.

In the article, Asness was unequivocal in his conclusion that hedge funds not keeping up with equities during a nine-year bull market was completely predictable and is certainly not a reason to worry about the performance of these firms.

Hedge Fund Redemptions at 20 Month High

Redemptions from hedge funds hit a 20-month high in June, according to the Barclay Fund Flow Indicator, as the financial markets weighed the risks of trade disputes and rising interest rates. Industry assets remained at $3.0 trillion, however, the firm says.
Data drawn from more than 5,000 hedge funds in the BarclayHedge database estimated that the hedge fund industry (excluding CTAs) gave up $8.9 billion (-0.3% of assets) in June, reversing inflows of $4.0 billion (0.1% of assets) the month before. June marked the largest outflow since October 2016.

CTAs Register Small Gains in July

The flash estimate for the Barclay CTA Index, compiled by BarclayHedge, indicates a 0.21% gain in July. Year-to-date, the index has lost 1.98%.

“Although managed futures were able to register a small gain in July with 57% of the underlying index constituents reporting profits, the dispersion of monthly returns was quite high, ranging from a 41% gain down to a 15% loss,” says Sol Waksman, founder and president of BarclayHedge.

Four of Barclay’s managed futures indices had gains in July, while six had losses. The Cryptocurrency Traders Index was up 5.28%, the Agricultural Traders Index gained 1.04%, and Discretionary Traders Index was up 0.67%.

Hedge Funds Shake Off Tech Decline: BarclayHedge

Hedge Funds gained 0.54% in July according to the Barclay Hedge Fund Index compiled by BarclayHedge, versus a 3.72% increase in the S&P 500 Total Return Index. Year to date, the Barclay Index is up 1.04%, while the S&P has gained 6.47%.
“In spite of July’s rise in global equities, hedge fund performance was mixed,” says Sol Waksman, founder and president of BarclayHedge. “Technology funds were negatively impacted by Facebook’s record 20 percent decline triggered by the announcement of weaker-than-expected revenue growth.”

Survey Highlights Hedge Fund AI Usage

Artificial intelligence (AI) and machine learning (ML) are reshaping the alternative investments landscape, but professional financial managers still make the most pivotal decisions, according to a new survey from BarclayHedge.

In a sample of 55 hedge funds that responded to the survey, 56% said they use AI/ML to inform investment decisions, with most of the firms that use these tools saying that they do so in order to generate trading ideas and optimise portfolios.

Well over half of the respondents, 58%, have used AI for three or more years, while 37% have used the technology for five-plus years.

Hedge fund managers were among the earliest adopters of advanced algorithms and artificial intelligence techniques, which helps explain why a plurality of survey respondents said they have been using AI/ML for more than five years.