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Credit Suisse Paper Explores Noteworthy Hedge Fund Trends For 2014

researchNew York (HedgeCo.Net) – Credit Suisse Asset Management today released the 2013 Liquid Alternative Beta Performance Review. The paper examines key factors that drove liquid alternative strategy performance in 2013 and explores some of the noteworthy trends that could continue to play out in 2014.

Highlights from the report include:

    • Event Driven was the best performing LAB strategy, finishing up 11% due primarily to Russell 2000 and iBoxx High Yield Bond exposures;
    • Credit Suisse’s unique Illiquidity Premium factor also contributed positively to Event Driven strategy performance in 2013. The weight of the Illiquidity Factor grew throughout the year, suggesting that managers in the space are taking greater illiquidity risk as they search for yield;
    • Systematic trading strategies, including Managed Futures and Merger Arbitrage, had a banner year, finishing up 7.5% and 7.0% respectively; and

Looking ahead to 2014, Managed Futures could be well positioned to benefit from trends across asset classes while Merger Arbitrage could continue to benefit from a favorable economic environment and excess cash on company balance sheets.

The paper can be downloaded from the Education section on www.credit-suisse.com/lab .

The LAB series of indices seek to replicate the aggregate return profiles of hedge fund strategies using liquid instruments. LAB indices are priced daily and constructed using an objective and transparent rules-based methodology, making them ideal candidates for index-linked products.

The LAB indices are benchmarked to the market-leading Credit Suisse Hedge Fund Indexes. As the industry’s premier asset-weighted hedge fund indexes, the Credit Suisse Hedge Fund Index platform consists of a range of geographical and strategy-specific hedge fund indexes that are constructed from a proprietary database of more than 9,000 hedge funds which seeks to provide the most accurate representation of the hedge fund universe. 

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