International Herald Tribune – Investors planning to put money into hedge funds, frustrated this year by the lowest returns in three years, are allocating more of their money to managers who bet on stocks and economic trends because they expect them to post the biggest gains in 2006.
“Global macro will produce the highest returns, followed by equity hedge funds,” said Luis Rodriguez, head of risk management at Manhattan Family Office in New York, which invests more than $1 billion on behalf of an unidentified wealthy family. He expects returns from both strategies to exceed 8 percent next year.
Equity hedge funds posted an average return of 8.2 percent in the first 11 months of this year, according to data compiled by Chicago-based Hedge Fund Research. Macro funds, whose managers evaluate global economies to decide what stocks, bonds, currencies and commodities to buy, climbed 5.9 percent.
So-called long-short equity funds, which wager on rising as well as falling share prices, received almost 20 percent of the net $47.7 billion that flowed into hedge funds in the first three quarters of 2005, Hedge Fund Research reported. Macro funds attracted about 16 percent of assets.
