"The average hedge fund has returned +4% YTD, lagging the S&P 500 (+9%) for the eighth year in a row. The latest hedge fund and mutual fund filings highlight Info Tech stocks as particularly vulnerable in terms of positioning"
It's not just Paulson who's had a terrible year: so has the majority of the hedge fund community, as confirmed by the record outflows from active managers, which as BofA forecast overnight, will be eclipsed by passive managers some time in 2023.
As BofA reports in its latest weekly client flow update, the bank's largest, institutional clients have now sold stocks for a record 21 consecutive weeks. The reason: soaring redemption requests as clients continue to shift out of active funds and into cheaper, passive options.
“The best-informed market participants seem unenthusiastic about U.S. stocks at current prices,” said David Santschi, chief executive officer at TrimTabs. “Insider buying is running at the slowest pace for October in the past five years.”
Portfolio managers at hedge funds, facing an exodus of investors frustrated with high fees, are about to feel the pain from an estimated 34 percent reduction in their compensation. “2016 should prove to be a belt-tightening year. This pessimistic viewpoint is justified, given the poor industry performance.”
"Has the bull market in government bonds finally ended... A change in the wind is being felt as governments listen to the central banks’ recent call for fiscal, rather than monetary policy, to do the heavy policy lifting from hereon in. Is the long bull market in bonds now over."