Difficult, challenging and jittery are the adjectives some of our contributors used to describe the volatile markets and corresponding returns over 2015. In the main, it was the hedge fund sector that struggled the most, with HFR’s Ken Heinz reporting that the HFRI Fund Weighted Composite Index posted a gain of +0.03 per cent through October end. Low by historical hedge funds standards, yes, but exceeding the return or yield of almost anything they could invest in, including many equity market indices, commodities and newly issued, short dated bills of the US, Germany and most financially solvent countries.
Other sectors where we search for alpha have done better. Private equity and real estate remain robust, depending on their underlying markets, and a stand out growth figure from our 2015 comments is the European growth of more than 340 per cent in AUM over the year for ETF provider WisdomTree Europe. Assets under management here grew from USD160 million to over USD700 million over the year, giving us even more evidence that investors increasingly favour ETFs, in all their range of styles and degrees of smartness.
And turning to 2016, we see rate rises on the cards which will surely put some energy back into markets that have been largely passive and vulnerable to being beaten up by macro-economic shocks.
Wherever you are at the end of 2015, we wish you happy holidays and a prosperous and peaceful New Year.
Beverly Chandler
Managing editor, AlphaQ
Email: beverly.chandler@globalfundmedia.com
