Financial News Highlights | March 12th-19th, 2018
INDUSTRY SNAPSHOT – March 12th to 19th
Hedge funds are long the VIX for the first time since 2016. Is this an early sign of better trading opportunities for hedge fund managers?
The recent spike in volatility seems to have caught hedge fund managers off guard as the markets had been relatively calm over the past two years (2016-17). This is evident in February’s dismal performance of volatility hedge funds holding long positions since it was the perfect opportunity for them to have posted profits. Hedge funds are now betting that the turmoil will continue which gives them a platform to improve their trading strategies in order to offset any losses experienced last month.
Read more here – Hedge Funds Bet on Volatility
Mutual funds win a significant concession from the SEC. Is replacing a liquidity table with a narrative description really meaningful disclosure?
The SEC voted 3-2 on Monday to approve a proposal that would let mutual funds withhold liquidity information from shareholders. Instead, they would share narrative brochures describing how the fund would handle liquidity risk. Some members of the committee, including SEC Chairman Jay Clayton, defended the plan citing that liquidity assessment is subjective and might differ with each manager, thus pushing investors away from low liquidity funds. But those that voted against it believe this is just another step to decrease transparency and keep crucial information away from the public eye.
Is Crypto going mainstream? Barclays becomes the first major bank to offer Bitcoin deposit accounts with Coinbase.
After having faced skepticism for being too risky, cryptocurrencies are now garnering legitimacy following the deal between Barclays and Coinbase. The latter has a growing market share in UK but one of their biggest user complaints was the inability to conduct transactions in GBP. This is now mitigated by having Barclays house the users’ accounts. Moreover, the licence from Financial Conduct Authority reinstates that the company’s compliance and operational practices are at par with the industry thus lending extra credibility to the sector.
Read more here – Courting Crypto: Barclays Breaks Rank With Coinbase Deal
Are Global Macro funds making a comeback? After a long stretch of mediocre returns and investor disinterest, we see BBL trying to launch a large macro fund.
One of the biggest oil hedge funds, BBL Commodities LLP is looking to raise $1 billion in financing for a macro fund even though many in this category have recently closed down. This comes at the hand of algorithm based trading strategies which make it almost impossible for human traders to compete against. But BBL believes its work with commodities gives it an edge. They hope to utilize the macro strategy to its full potential and exploit trends in oil prices.
Read more here – Oil Hedge Fund BBL Looks to Launch $1 Billion Macro Fund
Source: The Wall Street Journal