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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Lawyers who represent investors against Berkeley Burke over allegations of mis-sold Sipps estimate more than 1,000 claims could be in the pipeline. The High Court has approved a group litigation order relating to claims against Berkeley Burke Sipp Administration, and those affected have until 23 July 2018 to register to join the group action. It […]
Do not be spooked by recent falls. The bull market has further to run. Stockmarkets have been thriving in the not-too-hot, not-too-cold “Goldilocks” backdrop of the last few years. Growth has been strong enough to boost profits, and inflation low enough to keep central bank policy loose. Recent stockmarket weakness is centred on signs that […]
The FCA continues to engage with the asset management industry on new European regulations as questions remain over how firms should report costs and charges. After over a month since Mifid II and Priips came into force, concerns have been raised on how fund fees, in particular transaction costs, should be calculated under the two […]