Hedge Fund Portfolio Density and Turnover Hedge fund portfolio density has steadly increased, and fund turnover has declined over the past decade. High concentration risk can lead to high losses and affect the financial system. Image: Goldman Sachs
Survey: What Is The Most Effective Risk-Off Hedge? In the latest BofA Merrill Lynch edition of the FX and rates sentiment survey, a majority of respondents preferred 10-year Treasuries as the most effective risk-off hedge. Only 6% of respondents chose gold and the yen. Image: BofA Merrill Lynch
U.S. Bond Market Hedged and Unhedged Investors are frantically searching for yield, knowing that 25% of all bonds in the world trade at negative interest rates. Our world is aging with high levels of debt and low interest rates (maybe for a long time). Image: Fidelity Investments
S&P 500 and Hedge Fund Exposure While the S&P 500 is at all-time high, hedge funds increase their exposure to equities (last = 0.52). Image: Sentimentrader
Performance of Hedge Fund Index vs. S&P 500 Hedge fund returns have not been as good as those of the S&P 500, but volatility has been lower. Image: Richardson Wealth
Hedge Fund Industry Outperformance – Negative over Past Decade The chart below shows how it’s hard to beat the market over time. Image: Greenline Partners LLC
Estimated Number of Hedge Funds Launched or Closed since 2008 Can hedge funds deliver higher returns than passive investing? Not really. But many investors still think they can achieve higher returns with active trading than with passive investing. The chart below shows that it is really hard to outperform the market. As Warren Buffett said,…
“Hedge Funds Are Shorting the VIX at a Rate Never Seen Before” -Bloomberg This certainly won’t not end well. Why do we never learn some lessons and repeat the same mistakes? Image: Hedgeye Risk Management LLC
America’s Magnificent Seven Stocks Both mutual funds and hedge funds have trimmed their exposure to the “Magnificent 7” stocks, indicating mounting concerns over the continued outperformance of these market darlings. Image: Goldman Sachs Global Investment Research
U.S. Equity Futures – Asset Managers Asset managers’ positions in U.S. equity futures are extremely stretched, raising concerns about excessive optimism. Image: J.P. Morgan Flows and Liquidity Team
Gold Price Gold’s impressive performance in 2024 can be attributed to strong central bank purchases, its role as a safe haven during uncertain times, and its effectiveness as an inflation hedge. Image: Bloomberg