Reuters UK – The hedge fund industry’s trade-of-the-moment — betting on falling financial stocks and rising commodities — is set to offer further profits, despite July’s setback, but managers may have to alter their tactics.
Hedge funds may well profit from betting July’s bounce in battered financial stocks and decline in commodities was only a blip in a longer-term trend, since the fundamental reasons for disliking bank stocks and holding commodities remain intact.
However, with investors nervously watching every piece of performance data, many funds have had to scale back the size of these bets to avoid further poor numbers — or are taking bets likely to be less painful if markets go against them.
