| | Regime change
Stock markets soared this week after US drug manufacturer Pfizer and Germany’s BioNTech revealed a breakthrough in their large-scale Covid-19 vaccine trials, with tests suggesting their jointly-developed treatment is some 90 per cent effective in preventing coronavirus.
Combined with Joe Biden’s delayed-but-ultimately-decisive victory over Donald Trump in the hotly-contested US presidential election, the announcement could dramatically recalibrate the investment landscape for all asset classes with just over six weeks left of the year.
Of course, December can often be a month underpinned by uncertainty, with investors opting to take risk off the table in the run-up to the holidays before rejoining the fray in the new year. The final outcome of the Brexit negotiations remains unclear, and may yet possibly drive further market volatility between now and the end of the year.
For their part, though, hedge funds have largely weathered the recent October turbulence and renewed lockdowns, and remain in positive territory for the year. Equity-focused strategies were powered by gains from healthcare and technology, while event driven managers rose on the back of growing expectations of more M&A activity heading into 2021.
Managers of all strategies will be keeping a close eye on how the broader news cycle drives sentiment between now and the end of 2020.
Already, Pershing Square chief Bill Ackman – the high-profile activist manager who scored a stellar USD2.6 billion gain during March’s market rupture – is building another sizeable bet based around corporate defaults stemming from the coronavirus.
The deadly pandemic has upended all corners of the economy and society, with the hedge fund industry no different.
But as speakers at this week’s HedgeweekLIVE Europe summit observed, the industry has demonstrated its ability to quickly react and adapt its business structures and operational models in the face of such an unprecedented shock.
Meanwhile, on the client-facing side, two new surveys underline once again this sector’s capacity to withstand economic turbulence and market volatility through active management – a quality which has not gone unnoticed by investors.
Hugh Leask
Editor, Hedgeweek
| | ADVERTISEMENT | | | | | | | | “Radical change”: Covid-19 is ultimate stress test for hedge funds’ cybersecurity | | Fri | 13 Nov 2020, 12:18 | | The shift to remote working as a result of the coronavirus pandemic proved to be the ultimate stress test for hedge funds’ cybersecurity and business continuity processes – but speakers at this year’s Hedgeweek LIVE Europe digital summit believe the industry has coped well with the unprecedented disruption. |
| | | | | | | | | | | | | | | | EEX sets new record in Japanese Power Futures | | Fri | 13 Nov 2020, 12:18 | | The European Energy Exchange (EEX) has recorded its highest trading volume to date in Japanese Power Futures. Throughout the month of October, EEX achieved a total traded volume of 111 GWh, thereby setting a new monthly record. |
| | | | ADVERTISEMENT | | | | | | | | | | Wilshire Liquid Alternative Index falls 0.51 per cent in October | | Fri | 13 Nov 2020, 12:18 | | The Wilshire Liquid Alternative Index, which provides a representative baseline for how the broad liquid alternative investment category performs, returned -0.51 p[er cent in October, underperforming the -0.22 per cent monthly return of the HFRX Global Hedge Fund Index. |
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