NEW YORK- Hedge funds that bet on bonds, currencies, stocks and commodities are among the industry’s biggest winners this year easily outpacing growth and tech funds’ returns and preparing to see significant inflows of capital as the stock market hovers near bear market territory.
So-called global macro funds returned 10.3 percent in the first four months of the year while the average hedge fund inched up 1.9 percent, according to data from Hedge Fund Research. The Standard & Poor’s 500 index tumbled 13 percent in that period.
Over the last three years, global macro funds on average delivered positive returns but they also trailed behind the hedge fund industry’s stronger returns.
Now with inflation surging and volatility ticking higher as central banks reverse years of monetary stimulus, the environment looks to be especially good for global macro funds.
“This environment will most likely lead to new inflows of capital to the strategy at the expense of other funds,” said EamonMcCooey, head of prime services at Wells Fargo.
Global macro funds invest only about 17 percent of the industry’s $4 trillion in assets, less than the roughly 30 percent invested by equity-focused hedge funds and the 28 percent invested by funds that bet on corporate events, Hedge Fund Research data show.
Through the first quarter, the latest available data, flows were picking up as investors sent $3 billion in new capital into these strategies, compared with $1.9 billion going into equity oriented funds. Overall $19.8 billion was added in the first quarter, HFR data show. – Reuters
