Funds Hub

Money managers under the microscope

CQS upbeat on credit

August 10, 2010

It’s not often that the bigger hedge fund firms share their market positioning, especially at a time when funds are struggling to find decent investmentĀ ideas.

So it’s interesting to see CQS, which runs $7.5 bln, offering its views on credit markets.

The firm upped its risk across investment grade and junk bond markets 3-4 weeks ago, and, despite taking off some bets during the rally, is still positive short-term.

It cites cheap valuations and also the condition of the economy — while many believe a severe double dip has been averted (hence the recent narrowing in credit spreads), this doesn’t mean the economic picture will be rosy. CQS argues growth won’t be strong enought to force up interest rates, meaning bond prices would still be supported.

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