Where are hedge funds headed now? How has COVID-19 impacted their movements and strategies? Here we take a look at some of the recent news.
In June it seemed like the stock markets were engaged in a positive trend. The S&P 500 registered a 2.33 percent performance, making its fifth consecutive month of profits.
According to a Nickel Digital rep:
“We are seeing active and continuous engagement from the entire institutional community, including (but not limited to) pensions, foundations, endowments and funds of hedge funds. Recent volatility has proved to be an opportunity for certain trading strategies (like market-neutral arbitrage) while being a headwind for others (beta exposures to underlying crypto assets). In fact, it created an immediate demand for lower-volatility defensive funds. The investment objective, sizing and risk tolerance are the critical factors in assessing any investment opportunity, especially in crypto.”
Stakeholders are finding that asset managers are less concerned about regulatory risks with the increase in institutional players into the crypto industry. Financial regulators seem to be much more concerned about protecting retail investors.
There has also been a lot of discussion on the optimistic future for hedge funds within the next 10 years. Research firm PivotalPath believes that there has been – and will continue to be – the enhancement of hedge fund activity due to improved performance and investors having a much more realistic expectations about what they can expect from hedge funds.
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