{"id":4400,"date":"2006-05-10T00:00:00","date_gmt":"2006-05-10T00:00:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-30T04:00:00","slug":"gap-shortens-between-hedge-funds-and-traditional-funds","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/05\/2006\/gap-shortens-between-hedge-funds-and-traditional-funds.html","title":{"rendered":"Gap Shortens Between Hedge Funds and Traditional Funds"},"content":{"rendered":"
WEST PALM BEACH, FL (HEDGECO.NET) – Some traditional bond funds have recently started taking up hedge fund strategies to help protect assets in tough market conditions and working them to show a profit whether the stocks are going up or down. <\/p>\n

The major differences between hedge funds and more traditional funds are getting smaller in the EU. The boundaries have already begun to fade since the introduction of new European Union \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cfund passport\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d rules. Although still further EU rule changes will be required because current ones do not provide funds with adequate powers to short or take an especially large position in another fund or asset. <\/p>\n

In an interview with Reuters, Mark Kary said, \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cI ultimately believe equity long short and long only will merge, (Hedging) is simply a risk management tool for running equity portfolios \u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u00a6 I think the industry will change, but it will take quite a while to change.\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d Kary is chief executive of Polar Capital Partners, Polar runs $2.8 billion (1.5 billion pounds) of assets in both traditional and hedge funds. <\/p>\n

Hedge fund trading involves high fees, above average risk, but higher average returns. In contrast, traditional funds tend to go long (buy and hold) or sell something they already own. Their performance tends to be more correlated to overall stock market performance, and their fees tend to be around half a percentage point. <\/p>\n

Kary also said investors will allocate more to hedge funds in the coming years because the strong stock market performance of the past three years is unlikely to be maintained. <\/p>\n

\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cI do think allocations to alternatives, specifically hedge funds, will increase,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d he told a conference organised by brokerage Bridgewell Securities. \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cHedge fund allocations have quietened because the equity market has risen, but I assume the equity market will have a slightly tougher time in the next two years,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d he said. <\/p>\n

Cazenove is one company that recently took to hedge fund strategy. Working with long bias in emerging markets and targeting expected developed country winners and the third will short expected developed country losers. \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cThe concept is to look at global winners and losers combined with emerging markets to provide the sustainability of annualised returns rather than the \u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u00a6 volatility we have seen from emerging market exposure,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d said Robin Minter-Kemp, managing director of Cazenove Capital. Cazenove currently has about $850 million under management in three other hedge funds based in Europe. <\/p>\n

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net <\/p>\n

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Be sure to check out our sister sites. www.hedgefundlounge.com<\/a>, www.hedgefundtools.com,<\/a><\/strong> and www.hedgefundemployment.com.<\/strong><\/a> <\/p>\n

  <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

WEST PALM BEACH, FL (HEDGECO.NET) – Some traditional bond funds have recently started taking up hedge fund strategies to help protect assets in tough market conditions and working them to show a profit whether the stocks are going up or […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-4400","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/4400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=4400"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/4400\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=4400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=4400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=4400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}