Short-Term Bets Rule In Volatile Europe

Oct 4 2011 | 3:06am ET

Hedge funds that have given up trying to make sense of Europe's market volatility are besting those seeking a sensible narrative.

Long-term bets are killing hedge funds seeking to invest based on the continent's debt crisis. But those that are nimbly jumping into and out of the markets, such as relative value traders, are doing quite well, Reuters reports.

"The smart money is not trying to predict the endgame," Man Group's Luke Ellis said. "If you hang on, you can get a volatile position, your risk management stops you and you get a loss."

"The smart money is using the swings and roundabouts of political debate to get into and out of trades."

With 3% to 4% daily swings in the market now commonplace, "if you take a long-term bet you could be wrong for a very long time," AXA Investment Managers fund of hedge funds chief Francisco Arcilla told Reuters, and "tolerance to be wrong for a very long time isn't there."

"If there isn't enough stability and persistence within the market itself it's very difficult to invest or trade or to make consistent gains," Viognier Capital Management's Andrew Mann added. "You find yourself a hero for three days and then on the fourth day it's back to square one."


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note