View more on these topics

Numis backs hedges as cushion

Numis Securities expects listed multi-strategy funds of hedge funds to provide a cushion against equity market falls rather than full capital protection, as exposure to equity long/short managers means some correlation to equity markets is inevitable.

The research firm says market conditions seem to resemble those of 2008, with falls in most asset classes, high volatility and greater correlation between stocks in the same sectors.

It sees hedge funds as better equipped to survive the turmoil than during the credit crunch because they have lower levels of gearing and are not under pressure to sell assets due to redemption requests from investors.

Numis expects returns within the listed hedge fund sector to vary, depending on whether the funds follow a multi-strategy funds of hedge funds, credit or macro strategy.

Listed multi-strategy funds of hedge funds provide diversified exposure to a range of hedge fund strategies. Numis says the net asset values of these funds fell in the 2008 credit crisis, disappointing investors who had expected them to protect their capital.

It says many investors with a defensive outlook had bought listed hedge funds as an alternative to cash but discounts widened sharply which resulted in higher losses than equity markets.

Numis says many funds of hedge funds suffered losses in June to August this year and in the weak markets of May to June 2010 but substantially less than the falls in equity markets. It also points out that corporate action to manage discounts or return cash to shareholders through wind-ups may enhance the appeal of listed funds of hedge funds.



FTSE 100 slumps 4.64% at close as US markets continue to fall

The FTSE 100 closed down 4.64 per cent today and US stock markets fell in morning trades following news of the US Federal Reserve’s economic stimulus. The Dow Jones Industrial Index was down 3.34 per cent to 10,754 by 11.40am while the S&P 500 was down 3 per cent to 1,131. The stimulus plan, called […]

Standard Life looks at MyFolio income

Standard Life is considering launching an income version of its risk-rated multi-asset fund range MyFolio. The MyFolio range has 15 funds, including five managed funds, five market funds and five multi-manager funds. Head of UK wholesale Jacqueline Kerr says: “MyFolio is focused at the moment on the accumulation period and we need to look at […]

Steve Webb positive on save more tomorrow pledge

Pensions minister Steve Webb says the Government should look at strategies to increase pension contribution levels, such as Save More Tomorrow, once the current auto-enrolment reforms have bedded in. At a fringe event at the LibDem conference in Birmingham this week, Webb said the Government would be looking at ways of ensuring people do not […]


Does bank guarantee take away caveat emptor?

The Financial Services Compensation Scheme’s guarantee of bank deposits has not taken responsibility away from the consumer, according to replies to a question posed by a joint committee member. Lord Maples asked if the FSCS’s guarantee of deposits up to £85,000 undermined the principle of caveat emptor, encouraging people to chase accounts with higher returns […]

Bonds in 2017: Stick or twist?

Royal London Asset Management Bond Fund Managers Paola Binns and Craig Inches look at why short duration could be a key tactic for fixed income investors during 2017. Read the full article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm