Lyxor's L/S Equity Neutral peer group was down -2.8% year-to-date, hurt by extreme trading conditions and the
constituents' average market beta of 20%. The environment has been challenging for the strategy amid extreme stock
volatility and unsettling heavy systematic trading volumes.
In the space of alternative strategies, Global Macro and Event-Driven strategies rebounded the most since March 23rd. Both Merger Arbitrage and Special Situations sub strategies benefitted as M&A deal spreads tightened significantly since mid-March.
Should alternative portfolios favor smaller, medium, or larger hedge funds? The choice might not be as obvious as before and may be more dependent on the stage of the business cycle. For many years, small hedge funds have
steadily outperformed their large peers, sometimes by double digits in the 2000's....
Despite the escalation of trade tensions during the
third quarter, economic activity has remained quite
resilient. Macro data releases even managed to
beat expectations in the U.S. and in Japan, leading
to a sudden rise in bond yields over the course of
September.
Progress in trade talks between the U.S. and China and in Brexit negotiations knocked down safe assets last week.
Bond yields rose in most developed countries and gold prices fell, as the stance on both thorny issues reversed and
turned positive.