Volatile markets redefine trade component of hedge fund strategies, "position calibration" becomes source of alpha

From Kirsten Bischoff, Opalesque New York:

The markets have changed. Levels of volatility have greatly increased, and the uncertainty that the financial crisis has unleashed on investors is likely to remain for the foreseeable future. These factors make it much more likely that the markets will continue to move from one extreme to the next and strengthen the need for investors to understand and analyze the trade methods of hedge fund managers during the due diligence process.
Specific to the hedge fund industry, it has been determined that investors reallocating to hedge funds are favoring the simplest and the most liquid strategies, which can include strategies that utilize frequent trading.
"The one issue that hedge fund investors must realize is that hedge fund strategies are much more about 'trading' than 'investment'", points out Rene Levesque, Founder of hedge fund due diligence and research firm Mountjoy Capital (www.MountJoyCapital.com).
Levesque, who's background includes overseeing research for a $2bln Canadian based FoHF, positions in back and middle offices, and time as an equity derivatives prop trader, concentrates on the analysis of 14 different factors when providing his clients with fund evaluations

Full story: http://www.opalesque.com/53821/Volatile_markets_redefine_trade_component_of821.html

Volatile markets redefine trade component of hedge fund strategies, "position calibration" becomes source of alpha

From Kirsten Bischoff, Opalesque New York:

The markets have changed. Levels of volatility have greatly increased, and the uncertainty that the financial crisis has unleashed on investors is likely to remain for the foreseeable future. These factors make it much more likely that the markets will continue to move from one extreme to the next and strengthen the need for investors to understand and analyze the trade methods of hedge fund managers during the due diligence process.
Specific to the hedge fund industry, it has been determined that investors reallocating to hedge funds are favoring the simplest and the most liquid strategies, which can include strategies that utilize frequent trading.
"The one issue that hedge fund investors must realize is that hedge fund strategies are much more about 'trading' than 'investment'", points out Rene Levesque, Founder of hedge fund due diligence and research firm Mountjoy Capital (www.MountJoyCapital.com).
Levesque, who's background includes overseeing research for a $2bln Canadian based FoHF, positions in back and middle offices, and time as an equity derivatives prop trader, concentrates on the analysis of 14 different factors when providing his clients with fund evaluations

Full story: http://www.opalesque.com/53821/Volatile_markets_redefine_trade_component_of821.html

Hong Kong Securities and Futures Commission’s half yearly review of the securities market shows economic recovery is emerging

Image by JMRosenfeld via Flickr

From Komfie Manalo, Opalesque Asia:
The Hong Kong Securities and Futures Commissioner has just released its latest research paper entitled: “Half Yearly review of the Hong Kong Securities Market” which shows that despite the recent strong rebound of the global stock markets, fundamental support to the surge in the stock markets has not been broad-based. Signs of economic recovery are emerging at best. The recent rally in the stock market seems to be underpinned by a strong capital inflow, but it should be noted that capital movements are known to be volatile and subject to sudden reversals.
According to the paper, since the trough in early March this year, major stock markets have rebounded some 30% – 60% until the end of June. However, it is worth noting that such strong rebound might not be uncommon following a crisis.
The report says that Hong Kong stocks fell at the start of the year on uncertainties over the global economic performance and concerns about financial institutions in the U.S. The Hang Seng Index (HSI) and Hang Seng China Enterprise Index (HSCEI) dropped to this year’s trough in early March. Later, markets rebounded strongly on optimism over global economic recovery amid signs of stabilization in economies. In addition, strong capital inflow to the Hong Kong banking system and stock market also lifted the markets. During the first half of 2009, the HSI and the HSCEI rose 27.7% and 38.9% respectively from their end-2008 levels.
Full story: http://www.opalesque.com/53590/Hong_Kong_Securities_and_Futures_half590.html