During the strong 2019 equity bull market when the S&P 500 gained 31.5%, hedge funds returned 8.4%, according to HFR (27% of upside). During the 1Q 2020 Coronavirus Crisis, when the S&P 500 fell -19.6%, hedge funds fell -5.9% (30% downside). The outstanding question is: have hedge funds achieved goal within portfolios and what strategies should be favoured in 2H 2020?
Chris Solarz, managing director at Cliffwater, led a discussion with Pete Keliuotis, EVP and head of alternatives consulting at Callan; Frank Maeba, managing director at Neuberger Berman, and Alessio de Longis, senior portfolio manager and head of global tactical asset allocation at Invesco Investment Solutions, about how to add value to one’s portfolio.
The discussion focused on whether macro funds are protecting capital during this bear market, and whether they have a bigger place to play in portfolios. The discussion also looked at which strategies allocators should be considering, and whether the pendulum has swung to active from passive investments, among other topics.