Fund of hedge funds manager International Asset Management expects positive returns from event-driven and long/short equity strategies, which are both classified by the firm as medium risk.
The company says Asian and emerging markets still provide the highest long-term growth opportunities for long/short equ-ity managers but those focused on the US have the potential to provide high returns due to factors such as a reasonably priced market, strong earnings growth and monetary policy.
Event-driven strategies are still doing well as the recovery in mergers & acquisitions activity continues, with most activity happening in financials, materials and information technology.
IAM has a neutral view of other hedge fund strategies but feels macro and CTAs, also known as managed futures, have the highest risks. Within CTAs, a strategy that involves trading in commodity, futures and foreign currency markets, IAM favours med-ium to long-term trend followers. These recently lost money by investing in equities and commodities but made money on fixed income and foreign exchange markets.