Global Macro hedge funds have been struggling this year, however last month brought some respite from a series of tough returns, but only for a few players. Credit Suisse hedge fund index recorded a 1% increase in the global macro sub-strategy. The average return for the year has now edged up to +2.53% according to the index.
October saw overall positive news from the U.S and Europe; the main surprise contribution came from the last minute budget deal that was struck up in the U.S. The Eurozone remained largely uneventful in October, however a surprise cut in November drove interest rate to nearly zero, hurting longs in the euro. Other than the extension of the debt ceiling, the nomination of Janet Yellen as President Obama’s choice for Fed chair came as major market-moving news. Given that Yellen is supportive of an easy monetary policy, it is probable that Bernanke’s philosophy will prevail and Fed will reduce its unemployment rate target to a lower figure than 6.5%.
Global macro strategy is still coping
Most notably, Brevan Howard’s Emerging Market Strategies was up once again in last month with a 1.36% return, reducing the YTD loss to -11.7%. However BH’s Asia Fund, the consistent gainer of this year, lost 1.26% and is now up 8.1% overall. The flagship Brevan Howard Master Fund was down 0.59% and is now up only 0.84% for the year. Brevan Howard’s master fund is now dangerously close to recording its first down year in its history. Read more: Brevan Howard Overtakes Man Group As World’s Largest Hedge Fund Fortress Asia Macro Fund was up 0.47%, total gain has now edged up to 12.16%. BlueCrest Emerging Markets Fund was up 0.24% in October, netting a total gain of 3.5% for the year.
TT International up on long European equities
TT International Fund finally recorded a gain of +0.63% in October after underperforming for a few straight months. The fund recorded its highest profits in its European equity portfolio but suffered a minor loss in its long position in the euro against USD. Even though the Fed decided not to fix a time to taper QE, the meeting resulted in near-term expectations of the event. As a result the USD strengthened against the euro, affecting the fund’s position – TT International has now exited this hedge.