October 2015
Opinion The Fed’s Three Problems
First, let’s start with an apology: All too often this year our notes have focused on the U.S. Federal Reserve, or global monetary policy in general. In our defense, as the global economy becomes more dependent on debt, in all its forms, the importance of servicing that debt (...)
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October 2015
Opinion Indicators still good for European earnings
According to Tim Stevenson, Head of Europe Equity at Henderson Global Investors, with a clear increase in nervousness in recent months – especially August and September – it is perhaps time to ask “is that it in Europe”?
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October 2015
Opinion Market shakeout is not the new normal
A rare market shakeout in which all major asset classes fell over the past six months is not the ‘new normal’, says Lukas Daalder, Chief Investment Officer for Robeco Investment Solutions.
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October 2015
Opinion Fed: The Art of Evasion
The US Federal Reserve maintained a status quo on its interest rates at its September meeting, thereby extending a period of zero interest rates that has lasted for virtually seven years already. This decision, which ought to have reassured investors, was on the contrary (...)
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October 2015
Opinion Outlook Brazil
Brazil is in recession territory. The country’s fiscal consolidation plan had a major set-back in July as the finance minister Joaquim Levy announced a significant downward revision of the government’s primary fiscal surplus targets. In august, S&P placed Brazil’s foreign (...)
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October 2015
Opinion The European Credit Strategist: The year that QE failed?
According to BofA Merrill Lynch Global Research report, Month-to-date, investment-grade cash bond spreads are 21bp wider and high-yield cash bond spreads are 73bp wider. September is shaping up to be the worst month of the year for performance, and the year-to-date picture (...)
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September 2015
Opinion A Dovish Fed is Set to Support CTA and Macro Managers
Markets were on standby mode ahead of the Fed’s meeting last week. Hedge funds were flat and there was little dispersion in returns across the managers (see chart). Event-Driven outperformed as equity volatility edged lower. Meanwhile, Fixed Income strategies underperformed (...)
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September 2015
Opinion The Fed skips its turn... but for how much longer?
We think it is reasonable to bet on an upcoming monetary tightening (next December FOMC): The US economy can fully withstand some interest rate increases; the global economy, probably a bit less; and the financial markets (especially emerging), less still. This means that (...)
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September 2015
Opinion Fed Update: Fed Leaves Rates Unchanged
According to John L. Bellows, PhD, Portfolio Manager and Research Analyst with Western Asset, Janet Yellen’s decision has not changed his view of the Fed going forward. He continues to think the Fed will be responsive to changes in the outlook, and at the same time he thinks (...)
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September 2015
Opinion Fed passes its turn
This had been one of the most eagerly awaited FOMC meetings, but in the end the Federal Reserve decided to pass its turn. The last time the Fed Funds rate was raised, back in June 2006, there was a far more compelling case, making the central bank’s job a good deal easier: (...)
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September 2015
Opinion Suddenly last summer
There were bouts of volatility in financial markets this summer: collapse in Chinese equities, depreciation of the yuan dragging down emerging currencies, drastic fluctuations in equity markets in developed countries, collapse in commodity prices, etc. How can we interpret (...)
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September 2015
Opinion A critical change of paradigm for hedge funds
At the turn of the month, hedge funds rebounded as market conditions improved. The Lyxor Hedge Fund Index was up 0.4% last week, following a 3.3% drawdown in August. Year to date, hedge funds have demonstrated their ability to protect portfolios, returning - 0.3% whilst the (...)
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September 2015
Opinion European equities could provide haven amid global uncertainty
Given recent equity market volatility, now is an opportune moment to re-assess our view of European equities for the remainder of this year and into 2016. We continue to believe European equities offer almost ‘safe haven’ status in a world of increasing economic (...)
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September 2015
Opinion High dispersion of hedge funds’ returns in panic markets
The deflation and growth scares morphed into a vicious cycle last week. Multiple trading anomalies were observed, especially on Monday, suggesting that systematic and algorithmic trading amplified the sell-off.
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August 2015
Opinion The calm after the storm
During the first months of the year, investors were plain sailing, helped by easy monetary policy, robust economic data and stronger currencies. In euro terms, almost all asset classes generated positive returns...
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