Alternative Markets Update July 2019

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RESEARCH PERSPECTIVE VOL.111 JULY 2019 Download Research Perspective Alternative Markets Update July 2019 Hedge funds have achieved their best half year within the last decade, despite the controversies about hedge funds in the last year. Hedge funds overall have gained 5.7% since January 2019. Especially the month June was profitable, as hedge fund managers achieved a performance of 1.82%, which originates from a strong equity market. As of the beginning of July, only the long volatility strategy yielded negative returns, while the equity long bias strategy realized the highest gain with 10.56% in 2019 as per the Eurekahedge report below. Figure 1: Hedge Fund Strategy Return Map, Source: Eurekahedge July 2019 Furthermore, the pressure caused by the US-China trade war seems to decline due to optimism about the continuation of trade talks. The development of private equity seems promising as private equity deals have reached their highest level since the financial crisis and GPs have stacked $2.5tn cash ready for further purchases. The real estate industry's result largely depends on the country. In Germany for example, multi-asset investors increase their allocation in real estate, while the U.K. realized the worst month since 2009, due to the worries about Brexit. The market capitalization of cryptocurrencies reached $360bn with 24h trading volume of $80bn. Bitcoin’s renewed price rise to over $13k with a market capitalization of $232bn creates an interest in derivatives on cryptocurrencies. A similar development is observable for Ethereum with a price of $310 and a market capitalization of $33bn. The following analysis from Autonomous Next shows the negative correlation of the major 4 cryptocurrencies BTC, ETH, BCH, and LTC with the S&P 500 and gold, demonstrating crypto’s potential as alternative portfolio diversifier. Table 2: Crypto Market Volatility Report: May 2019, Source: SFOX Schedule a call with the team We have updated our privacy policy to take into account the new requirements of the GDPR. Please take some time to read the policy, which explains what personal data we collect, why we collect it, how we use it and other relevant information. You can review our privacy policy here, our anti-bribery policy here and our commitment to the UK stewardship code here. No action is required if you wish to remain in contact, however please reply if you want your details removed by contacting us at [email protected] or by using the unsubscribe button below. In case this newsletter has been forwarded to you and you want to subscribe, please click here. 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