Hedge Funds Currencies Trading
Hedge Funds Hurting From Volatile Currencies
Hedge funds are struggling to make returns trading in particularly volatile currencies. Many funds with strategies focused on currencies and other macroeconomic trends have been hit with losses in the last few months. Several of the hedge funds that are having trouble in currencies are the biggest names in the industry including Brevan Howard Asset Management and Tudor Investment Corp.
So-called macroeconomics funds, which make wagers on currencies and global economic events, were down 0.8% on average in the year to May 19, according to hedge-fund research firm HFR, with a 3.1% loss this month. And "systematic" macro funds that use computer programs to jump on market trends have given up 4.5% since Dec. 31. By contrast, hedge funds in general have returned 1.7%. Investors who bought U.S. blue-chip stocks instead of hedge funds have gained about 7%.
The list of losers reads like a Who's Who of the hedge fund world: A roughly $2.5 billion fund run by Geraldine Sundstrom at London's Brevan Howard Asset Management LLP, one of Europe's biggest hedge-fund firms; an $8 billion fund run by hedge-fund giant Tudor Investment Corp.; Caxton Associates' $5 billion Global Investment Ltd. fund; and New York-based Moore Capital Management's $7.5 billion Moore Global Investors fund, according to a report by HSBC Private Bank obtained by The Wall Street Journal.
The lackluster performance comes at a testing time for global financial markets. Traders are debating whether slower global growth and Europe's debt problems will scupper a two-year market boom. That uncertainty is making currencies more volatile and preventing clear trends and strategies from emerging. Source
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