Standard & Poor’s says while some funds of hedge funds achieve returns independent of market conditions, performance has generally been affected by factors such as low interest rates, lack of volatility and trendless markets.According to S&P, long/ short equity and global macro strategies have been worst hit while event-driven strategies, such as merger arbitrage, have held up better. Furthermore, as increasing numbers of managers identify and chase the same opportunities, the inefficiences which make it possible to achieve higher returns are being eroded. S&P says funds of hedge funds have done a good job in producing consistent returns year by year but performance can appear weaker on a month-by-month basis in response to market factors. Associate director, funds of hedge funds, Randal Goldsmith says: “Funds of hedge funds are designed to be independent but are not necessarily completely independent. We have seen that the returns produced five or 10 years ago tended to be better than those produced over the last couple of years. They do benefit from interest rates being higher rather than lower and they may be affected by factors such as general volatility and inflation. “However, it is not a question of markets going up and down but whether they are moving about a lot. Convertible arbitrage strategies require movement and have had a tough time while markets have been quiet.”
As the anniversary of mortgage regulation approaches, what is next on the FSA’s agenda?
John Howard is to take over as chairman of the Financial Services Consumer Panel from October, replacing Ann Foster who has been chair since 2003. Howard is a journalist, broadcaster and qualified solicitor. He has been a member of the panel for four years.
Gay couples should seek financial and legal advice before entering a same-sex marriage, says Clerical Medical. Once the Civil Partnerships Act comes into effect in December, giving legal recognition of gay relationships, the insurer advises couples to consider will planning, inheritance tax, capital gains tax, transfers of assets, tax planning for life and business purposes […]
Strutt & Parker Real Estate Financial Services has set up a property development fund which is eligible for IHT business property relief. It has a minimum investment of 250,000 and is not subject to IHT upon the death of the investor. It aims to deliver returns of between 10 and 15 per cent a year.
In the latest Investment Clock economic update, Ian Kernohan, Senior Economist at Royal London Asset Management, discusses the implications of the US Federal Reserve’s recent hike in interest rates and upcoming French presidential election. The value of investments and the income from them is not guaranteed and may go down as well as up and […]
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Three advice firms have stopped giving pension transfer advice following work by the FCA over the future of the British Steel Pension Scheme. A statement this afternoon details the FCA’s “information gathering exercise” to identify the firms that have been most active in advising people to transfer out of the scheme. The regulator got information from […]
The FCA has launched a consultation on its approach to authorisation and competition, which will be open to responses until March next year. Following the launch of the FCA’s mission in April, the approach documents are the second and third in a series of papers explaining how the watchdog tackles regulation. The first document, the […]