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How Badly Did Hedge Funds Underperform In February
As previously reported, the performance of the S&P in February was one for the history books, with a 5.5% return the highest since October of 2011 (when the global central banks stepped in to bailout not only Europe but the entire world). Of course, subsequently we learned that the only reason for the ridiculous outperformance was because companies announced a record amount of stock buybacks...
... all duly frontran by a algos traveling by laser beam, and which no longer responds to any fundamentals or newsflow, and can only frontrun either management teams or central banks.
So just how badly did hedge funds underperform in the month? According to Bank of America, by a lot to quite a lot. To wit:
The diversified hedge fund index was up 0.4% for the month of February, while the S&P 500 was up 6.0% on a price returns basis. CTAs unperformed the most in the month, down 1.9%, while Event Driven were up 2.4%.
The weekly performance in the week that just ended also lagged the market substantially:
Worse, the global hedge fund return over the past year is now negative. 2 and 20 for what again?
Finally, confirming once again that it was all company buybacks pushing US stocks higher in February is the observation by BofA that "Speculators sold S&P500 at the strongest pace in more than three months to decrease net long position."
And yet stocks ended higher despite the hedge funds selling (and thus once again underperforming the S&P)? Thank the overly generous bondholders without whose "use of proceeds" none of these record buybacks would have been possible.
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Hedge fund billionaires don't worry about the price of yachts, unlike their muppet customers.
I call upon the ghost of Fonzannoon to explain how this would all go down in front of the client....
"LOL yeah it usually goes something like this: "The bad news Mr. Client is we have some losses on some positions that I bought for you that I felt really good about. The good news is you have gains from the index funds you could have bought for $7.95 if you would just sell your soul to the bernakyellen already and embrace the blissful path they keep trying to get you to walk""
What 'ys think? Maybe the H-Bomb-Funds decided to flush out them pesky coattail shops relying on 3-1/2 month old SEC 13 F filings. At the least the insiders the Diebold selected for contracts bit character roles on the overly tedious long running C-SPAN soap opera got their tips way before the coattail position chameleons did.
I see another bail out on the horizon.......
bullish for stocks
CFOs must have shit for brains to be doing buybacks at these prices.
just lining their own pockets my friend.
Worthy of 1000 up votes.
Lets see, more stock buy backs, another flood of cheap money being forced unto the world compliments of the EU, algo's biased up (can't get into trouble for shorting stock you have no rights to) all creating a bit of supply demand imbalance. And yet some folks are convinced that stocks are going to crash.
And the corporate suites just issuing themselves more bonus stock options and cashing out very nicely. Yep the whole is screwed up but no where close to imploding.
lookee..i got a down vote....must be Eddie Lampert gutting the Sears carcass.
Worse, the global hedge fund return over the past year is now negative. 2 and 20 for what again?
1. Hookers
2. Blow
3. Over priced Midtown office space
4. BBG terminals
The US markets are irrelevant. Most investment is off-shore, most jobs are off-shore, most manufacturing is off-shore, most capitol is off-shore, most PM's are off-shore, - there are probably several I have missed - So to quote an idiot referring to off-shore terrorist activity - At this point, WHAT DIFFERENCE DOES IT MAKE. Go back to your bread and circus because fretting over the algo controlled financial markets with ever print of paper is beyond this countries control.
Welcome to the new normal.
As in you identify a company that is struggling --- short it --- the company taps into the trillions floating around the world at zirp --- buys back massive numbers of shares --- and your short gets crushed.
This is right and truly --- FUCKED UP SHIT!
$4 million in gold stolen from truck in North Carolina
http://www.wcvb.com/news/4-million-in-gold-stolen-from-truck-in-north-ca...
I heard a CEO talking on tv saying that because interest rates are near zero, borrow here, why bring back off-shore money to invest in his company - probably investing in China anyways.
They were betting on a rate increase
"CTA Advisors"? Is that advisors of the advisors? Like a PIN number?
But, what about our agreement to 2 & 20?
Sorry pal, when we lose money it's still 2%.