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.
Bill Lipschutz talks to Profit & Loss about how the FX market has changed since he founded Hathersage Capital Management, and why the barriers to entry for currency-focused hedge funds are going up, not down.
Profit & Loss: What products do you trade and what types of strategies do you deploy? How would you describe your trading philosophy?
Bill Lipschutz: Hathersage trades G10 currency pairs and plain vanilla options on those pairs. Our strategies embrace one or the other of two basic approaches. They are either: tactical, momentum driven or strategic, macro fundamental. We are 100% discretionary, highly focused and uniquely experienced.