The Bloomberg Hedge Fund Database shows hedge fund returns at negative 0.33% for the first half of 2018, after a 0.64% drop in June offset gains in May. Data from Bloomberg and Eurekahedge indicate that CTA/managed futures strategies in particular have been struggling, and Jamie McGeever writes that hedge funds' increased positions that the US yield curve will flatten are more likely to pay off than their positions that the dollar will strengthen.
Natasha Cazenave, head of policy and international affairs at France's Autorite des Marches Financiers, has called for renewed enthusiasm for a European capital markets union in light of Britain's imminent departure from the EU. Meanwhile, a joint statement from eight countries' finance ministers says the EU should redouble its efforts to create a capital markets union as Brexit and EU elections are on the horizon.
The Commodity Futures Trading Commission has issued an advisory about the risks involved in initial coin offerings and cryptoassets. The CFTC's advisory says "digital tokens and coins can also be derivatives or commodities, depending on how they are structured."
The Securities and Exchange Commission on Wednesday gave unanimous approval to a regulation that will require dark pools to increase their disclosure to investors. Starting in January, the rule will require brokers to file Form ATS-N to provide more information about fees, the way they handle orders and any arrangements with high-speed traders.
Mark Carney, governor of the Bank of England, says a no-deal Brexit would have significant consequences for the British economy and could influence whether the central bank raises interest rates. Wage growth has declined to 2.5%, the weakest level in six months.
The Financial Stability Board called for "vigilant monitoring" of cryptoassets because of the speed at which developments in the asset class are emerging and the fact that there are "gaps" in data about them. So far, cryptoassets don't present a significant threat to global financial stability, the FSB said.
May the Best Financial Instrument Win The latest Greenwich Associates research found that portfolio managers choose financial products based on past experience instead of analytics. While past knowledge is valuable, a more systematic selection could enhance fund returns. Download the research now.
Hedge funds globally have allocated at least $59 billion to responsible investment, according to a survey by AIMA and the Cayman Alternative Investment Summit. Around 40% of the respondents said they are already investing using responsible investment principles, with total assets in such investments worth $59 billion -- a little over 10% of the respondents' combined hedge fund assets under management. One in five firms said they are now committing at least 50% of their firms' assets to responsible investment. Moreover, firms said they had seen a roughly 50% increase in demand from either current or prospective investors in the past 12 months. About 40% of firms had either already hired a responsible investment specialist or were planning to do so. The full report is titled "From Niche to Mainstream: Responsible Investment and Hedge Funds." Read more and download the report.
Some of the most senior men and women in the global hedge fund industry have put forward their collective vision of the hedge fund firm of the future in a new report published by AIMA. The paper, "Perspectives: Industry Leaders on the Future of the Hedge Fund Industry," is sponsored by Aberdeen Standard Investments, the global investment company. It is based on candid and wide-ranging conversations with 25 of the leading figures in the industry and academia. The paper finds that hedge fund firms are rapidly transforming their product offerings and how they operate in order to meet the changing needs of investors. These changes include adopting artificial intelligence and other disruptive technologies and partnering with clients on responsible investment mandates. The interviewees also discuss, among other themes, fees, succession planning, employee diversity and client solutions based on "alpha," "smart beta" and "alternative beta." Read the paper.