Funds Hub
Money managers under the microscope
Morning Line-up: Glencore, gold rush, Galleon
News and views on the asset management industry from Reuters and elsewhere:
Glencore convertibles nearly double with IPO – FT
from Jeremy Gaunt:
Don’t invest in gold?
Bit of fun, this -- and might raise some issues about returning to the Gold Standard. The S&P 500 stock index priced in gold (thanks to Reuters graphics whiz Scott Barber):
Morning line-up: Eton, sovereigns and sport stars
News and views on the fund industry from Reuters and elsewhere:
Sovereign funds get merger mania – Reuters
…and tout for sport star biz – WSJ
Fees row in infrastructure – Reuters
Eton Park goes for gold – Bloomberg
from Global Investing:
What fund managers think
Bank of America-Merrill Lynch's monthly poll of around 200 fund managers had a few nuggets in the June version, aside from the usual mood-taking.
Gold is too expensive. A net 27 percent of respondent thought it overvalued, up from 13 percent in May. Then again, the respondents to this poll have reckoned gold is too pricey since September 2009.
The fall in the euro should be tailing off. A net 14 percent reckon the single currency is still overvalued, but that is way down from the net 45 percent who thought so in the May poll.
BP is good for pharma. The net percentage of fund managers who remain overweight in energy stocks plunged to 7 percent in June from 37 percent in May as oil has continued to spill into the Gulf of Mexico. The stock beneficiaries have been "dividend friendly" utilities, telecoms and pharmaceuticals.
China's growth is slowing. A net 27 percent of investors reckoned China's economy will weaken from where it is now over the next 12 months. That probably has mixed blessings given that investors both are expecting China to pull the world along the course of recovery and are worried about its economy overheating.
Overall, the poll showed fund managers to be cautious about the world economy but not giving up on riskier assets.
Noster stays cautious
Equities continue to steam ahead but at least one hedge fund manager is wary.
Noster Capital’s Pedro de Noronha is currently short the S&P 500, believing valuations are too high.
In addition, he sees a longer-term threat in the form of demographics: ‘baby boomers’ are now hitting retirement and will be selling equities to fund their annuity purchases, he argues.
His long position? Well, he’s defying Alan Miller’s warning and is long gold (in September he said it could go as high as $1,600).
Quantitative easing and buying by emerging market central banks should support it, he thinks.
(See also Gold – “the most dangerous asset”)
Gold – “the most dangerous asset”
A controversial call from hedge fund veteran Alan Miller.
The ex-New Star CIO, now a partner at Spencer-Churchill Miller Private, warns that the most dangerous asset to buy is gold, which is near a 3-week high of $1,128 an ounce.
“I realise that I will be burned at the stake for being a heretic but the most dangerous asset must be gold,” he writes.
“It has received huge speculative buying by individuals/funds who have never invested in it before (a very dangerous sign), creating an almost unprecedented price hike.
“The most dangerous words one can hear in investment are ‘it’s different this time’, as nearly every time it isn’t! And this is what all the gold bulls seem to be saying about gold at present.”
Morning line-up
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
SEC war on hedge’s derivatives – NY Post
Hedge funds could nab $11 bln from Lehman – Alphaville
Galleon brought down by beauty queen – Huffington Post
Hedgies pump up stock exposure – Reuters
Morning Line-up
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Citadel’s Griffin rebounds from $8 bln losses - Reuters
Convertible arbitrage rode out poor stock market – Hedge Funds Review
Competition for hedge fund support shakes prime broker ranks - Reuters
Moonraker finds hedgies have a Goldfinger
With a headline like that, you’d think this would be a story about investing in Bonds.
But in fact a survey by boutique fund firm Moonraker Fund Management shows U.S. hedge fund managers are buying physical gold to protect their wealth against high levels of inflation.
A recent fact-finding tour by Jeremy Charlesworth, CIO of Moonraker and manager of the commodities and global opportunities funds, found 20 out of 22 had been buying gold out of concerns quantitative easing would fuel price rises.
Charlesworth sees further gains in the gold price – which has risen from just over $800 an ounce in January to $930 now — and plans to raise exposure in both his funds.
“Gold is the ultimate currency, performing best when economies are at extremes, whether this is inflationary or deflationary,” he said.
“The managers I met in the U.S. know that if the politicians get the quantitative easing programme wrong then the value of money relative to real assets will dwindle.”
ML note – hedgies sell equities
Bank of America-Merrill Lynch’s latest “Hedge Fund Monitor” note shows managers are aggressively selling equities and building a record net long position in 2-year Treasuries.
According to the note, hedge funds last week continued to decrease aggressively their net long position in S&P 500 futures and added to net shorts in the Russell 2000.
In commodities they held onto their “crowded longs” in gold but added marginally to net shorts in copper, while in energy they cut their net long positions in crude oil and heating oil and marginally covered crowded shorts in natural gas.
Elsewhere, they added to shorts in 10-year Treasury notes and built a record net long in 2-years.
Meanwhile, market neutral funds’ market exposure dropped last week, while long/short funds are now modestly underweight equities.
You’re right that the note does refer to macro funds further on, although in the summary it refers simply to hedge funds or “large speculators”. But clearly it is not all types of hedge funds that are selling equities.
