Hedge Funds 02 (Dec 15 - Dec 27)

[behappyalways]

Singapore hedge fund Asia Genesis shuts after ‘big mistake’ on China trade
https://www.businesstimes.com.sg/compan ... take-china

[behappyalways]

Market Manipulation Trial Over Bill Hwang's Spectacular $36 Billion Implosion Begins This Week
https://www.zerohedge.com/markets/marke ... ion-begins

[winston]

Global hedge funds dump everything but real estate stocks, says Goldman Sachs

Hedge funds last week jettisoned global stocks and added bets they would decline.

Hedge funds in the week to Friday sold their stock holdings in every geographical region apart from developed markets in Asia.

The selling was the largest since August, when a stock market meltdown that started with the unwinding of yen carry trades rippled through to US tech stocks.

Hedge funds bet against all sectors but industrials, consumer discretionary, energy and communications services, equities bore the brunt of the selling.

The number of short positions, betting on falling industrial stocks, approached almost twice the number of longs that wagered this sector would rise,

Real estate stocks were the only sectors where hedge funds bet that values would rise.

All kinds of listed real estate stock have been popular with hedge funds including residential, retail and health care.

"If trade wars lead to higher import costs and broader inflationary pressures (via tariffs), real estate becomes an even more attractive hedge against eroding purchasing power."

Source: Reuters

https://www.thestandard.com.hk/breaking ... dman-Sachs

[winston]

Six reasons to avoid hedge funds

Financial success depends on disciplined saving and investing, not fancy investment products and high returns

by Raymond Kerzerho

1. Returns aren’t great
One group of researchers recently found that hedge fund fees capture 64 per cent of gross returns.

2. Diversification benefits are limited
Asymmetrical fee structure: the manager receives performance fees when the fund makes a profit but does not have to compensate the fund when it loses money.

3. Fees are way too high
Paying performance fees beyond the already pricey 1.5 per cent average base fee is bad enough but 86 per cent of hedge funds’ performance fees are not subject to any hurdle rate.

4. Complexity is not your friend

5. Attempts to predict outperformers will likely fail

Source: Business Times

https://www.businesstimes.com.sg/wealth ... edge-funds

[winston]

Hedge funds hit by AI sell-off, Goldman Sachs says

Investors have rotated out of technology companies and into defensive stocks such as Walmart on fears of AI disruptions to jobs.

Hedge fund managers, whose strategies focus on tech, telecoms and media companies, were down as much as 2.78% on Wednesday.

For investors to receive double-digit annual returns net of fees, hedge funds must average between one and two percent positive returns a month. To lose this amount in a single day could potentially have an impact on monthly returns.

Source: Reuters

https://www.investing.com/news/economy- ... ys-4487631