Watch onLONDON - Record cocoa prices and markets whipped around by inflation and geopolitics helped hedge funds using systematic strategies outperform their peers in the first quarter, according to industry players and investors.
The U.S. S&P 500 has risen over 11% so far this year, but Hong Kong's Hang Seng is down about 2%. Japan's Nikkei has rallied over 20% and European stocks lagged with 6% gains, with China up around 3%. "Great market for systematic managers, as they are typically equally long and short," said Weinberg. A short position bets an asset's value will fall; a long position bets on prices rising.
The top 10 performing trend funds, allowing almost two thirds more volatility than their peers, averaged about a 20% return for the first two months of this year, said Barclays prime brokerage data tracking hedge funds that was shared with Reuters.But even those with lower volatility allowances benefited from strong moves in agricultural commodities, currencies and energy, said several sources.
It also benefited from short bets against carbon emission permits, actively traded by companies needing to pay for carbon dioxide they emit, alongside speculators betting on their value. The $8.6 billion Aspect Capital, which returned 12% for the year to March 19, benefited from trends in cocoa, Chile's peso, the yen, stock markets and European emissions, a source close to the fund said.
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