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West Palm Beach (HedgeCo.net) – Credit Suisse announced the launch of a new Global Macro Replication Index which aims to capture the risk/return characteristics of the Credit Suisse/Tremont Global Macro Hedge Fund Index.
The new index enables investors to gain liquid, transparent insight into the global macro hedge fund sector.
"Due to a frequent lack of transparency, hedge fund investors found themselves exposed to numerous unforeseen risks in 2008, and problems were only exacerbated when liquidity dried up just as investors needed it most. Yet despite the drawbacks, hedge fund returns remain positive relative to equities and hedge funds continue to serve as an effective portfolio diversifier. Many investors have been left seeking liquid, transparent and cost effective solutions for gaining access to the asset class," Credit Suisse delcared.
Dr. Jordan Drachman, Head of Research for Credit Suisse Alternative Beta Strategies, said, “In the wake of current investor sentiment, replication strategies are gaining in popularity for their ability to provide similar risk/return characteristics to a well diversified portfolio of hedge funds, while avoiding certain drawbacks of hedge fund investing such as illiquidity, lack of transparency and headline risk.” Drachman added, “We are currently seeing increased interest in the Global Macro sector, as the strategy has a history of producing positive performance during market downturns and has been the top performing hedge fund sector since the inception of the Credit Suisse/Tremont Hedge Fund Index in 1994.”
The Global Macro Replication Index joins the existing Long/Short Equity Replication Index to become the second in a suite of Alternative Index Replication (AIR) products. Together, the indices offer insight to two of the largest and most popular hedge fund sectors in the current market environment.
Professor Bill Fung, a key research advisor to Credit Suisse’s alternative beta efforts, stated “In developing a replication index, it is imperative that researchers understand the in-depth intricacies of hedge fund sectors and individual manager performance.” Fung went on to say, “The team has access to superior data through the Credit Suisse/Tremont Hedge Fund Index. Together with regular contact with hedge fund managers, this combination provides practical insight into the behavior of hedge fund strategies and adds a level of fundamental analysis to the quantitative construction of the Index. This is particularly important in the Global Macro space which is dominated by managers that engage in dynamic strategies in an ever changing market environment; and these managers have done so successfully during very challenging times historically as well as more recently.”
Index values are finalized daily and quoted on Bloomberg under the symbol AIRI. Performance, descriptions, statistics and downloadable price history can be found on the newly launched Credit Suisse Alternative Beta website,www.credit-suisse.com/alternativebeta.
Credit Suisse has helped pioneer the measurement of alternative beta for more than a decade. By bringing together indexing expertise, an academic partnership with key research advisors and extensive global resources, Credit Suisse continues to lead the industry in developing alternative index replication products.
Business Spectator – European shares jumped for a fifth straight session on Monday, led higher by financials, as investor sentiment improved following further assurances over the health of the US banking sector.
At 0948 GMT, the FTSEurofirst 300 index of top shares was up 2.3 per cent at 718.41 points, extending the previous session’s gain of 0.8 per cent. But it is still down 14 per cent this year after plunging 45 per cent in 2008.
The broader STOXX 600 was up 2.1 per cent at 172.15 points, with banks and insurers topping the gainers list.
West Palm Beach (HedgeCo.net) – Finvest Asset Management is set to launch a new capital protected offering for investors who are seeking to generate annual returns of between 12-20 percent in a low risk structure.
The total offering is for $500 million and is open to non-U.S. investors only. The capital protected product will be offered to investors in the form of a U.S. Dollar denominated subscription. Downward pressure on the Euro relative to the dollar, will further enhance the investment and provide a source of upward performance for investors.
The Zurich-based Asset Management company has also received a mandate to allocate around $300m to the fund of hedge funds sector as part of a low-risk strategy to capitalise on the turbulence in global financial markets market.
Allocations will be made to funds that have a track record of at least three years, have an attractive Sharpe ratio, and are targeting annual returns of between 10 and 15 per cent. Funds of funds that may have incurred negative returns will not be excluded from the selection process.
"The decision to allocate to a hedge fund goes against the current trend," says Finvest portfolio strategist Mayer Greenwald. "However, we see a tremendous amount of upside in the fund of funds space, providing that portfolio managers apply the appropriate risk management." He argues that a good fund of funds can provide value in its ability to optimise allocations and achieve an appropriate risk/reward profile.
Finvest currently operates an office from Zurich and recently announced plans to open an office in London and Cypress. It also manages the Finvest Primer and Finvest Yankee funds.
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BBC – It may be a case of shutting the stable door after the thundering herd has bolted, but law and order is being brought to the wild wild west of global financial markets.
G Brown will, for example, in the coming days put on his Wyatt Earp costume, and will ask the financial gunslingers to hand over their weapons.
A huge and totemic encapsulation of the imminent arrival in town of a new breed of marshals and sheriffs is buried away in an article in today’s Wall Street Journal.
Bloomberg.com: UK & Ireland – “I’ve never lived through something like that,” Stephen Jarislowsky, the 83-year-old chairman and founder of Montreal-based money manager Jarislowsky Fraser Ltd., said yesterday about the past month on Wall Street.
“I don’t even think the ’30s were like that,” he said in a telephone interview. “At least they had a bank holiday and they closed all the banks. These idiots in Washington didn’t do that.”
On the worst day in global financial markets in 21 years, investors who have seen it all were left shaken. After the U.S. House of Representatives voted down a $700 billion rescue package supported by President George W. Bush and leaders of both parties, $1.2 trillion of market value was erased from U.S. stocks.
“I’m more than worried,” said Jarislowsky, who co-founded his firm in 1955 and oversees C$51 billion ($49 billion). “In a market like this, I’m not looking at opportunity. I am looking at preservation of capital. If governments aren’t careful and this mess isn’t solved fast, capitalism as we know will be wiped out.”
Reuters UK- A near one year-old credit crunch still has plenty of venom and will sting global financial markets and the economy well into next year or even into 2010, a Reuters poll found.
On the eve of its one-year anniversary at the start of August the credit crisis is still spitting out victims and darkening the outlooks from global central banks.
Most of the 87 economists polled from across Europe, the U.S. and Canada said the worst was not over and most felt that the fallout would last for another six to 12 months at least.
The sudden rescue plan for U.S. mortgage finance agencies Freddie Mac and Fannie Mae arranged by the U.S. Treasury and the collapse of IndyMac bank last week has 34 economists forecasting the crisis will roll on for another year or even more.
BEIJING (Reuters) – Bank of Communications Schroders Fund Management Co is aiming to raise up to 1 billion yuan for its first overseas fund later this month, despite sliding global financial markets, two company sources said.
Poor market conditions have sapped interest in funds launched recently under China’s Qualified Domestic Institutional Investor QDII.L scheme, which offers residents the chance to diversify their portfolios by buying global stocks and bonds.
In May, Yinhua Fund Management Co raised just 417 million yuan for China’s seventh QDII fund from a fund-management firm, far below its $2 billion target.
One of the sources said Bank of Communications Schroders was under pressure from the securities regulator to start marketing its first fund if it wanted to secure permission to launch others later.
