STONE MOUNTAIN CAPITAL RESEARCH PERSPECTIVE VOL.88
Figure 1. Stone Mountain Capital In-House Indices vs. Major Benchmark Indices Hedge Funds and Long Only in H1 2018, Stone Mountain Capital Research SMC strategy indices are not investable products but are used as indication of our managers’ performance and are calculated with the equally-weighted method.
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H1 2018 was rather disappointing for hedge funds, seeing outflows by end of the second quarter. According to data from Hedge Fund Research, investors invested more capital in equity hedge strategies, while they redeemed from event-driven, macro and relative value strategies. The shift in strategies was driven by the rising concerns over potential trade war, monetary policies from central banks, including interest rate decisions, and political uncertainty in major European countries. Performance was strong for strategies focusing on tech, and our equity long short manager sits on the top of our top-performing table. The divergence in central bank policies has favoured macro strategies focusing on traditional relative value bets and event-driven strategies that have catalyst elements. Our top performing strategies table consists of discretionary macro focusing on relative value trading and equity strategies that are engaged in activism and have a niche in US equities markets.
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Our in-house strategies in credit, equity and fund of funds, as measured by our indices, have performed better in the first half of the year than their traditional and alternative peers. Tactical trading is still lagging due to the struggling performance of the actively managed altcoin strategy this year mainly driven by falling bitcoin prices. Equities are the top performing and the bucket that has the most representatives in the top-5 performing table, followed by credit/fixed income strategies.
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