With the PBOC loosening its grip on the yuan, the Shanghai Composite collapsing like a wet taco, and the Fed prolonging its guessing game, 2015 has been anything but boring so far.
That said, not a lot of people have been encouraged by the myriad equity surprises and monetary plot twists this year, so here’s a little somethin somethin to keep things in perspective.
Here are the three best, and worst, things about being a fund manager in 2015.
Best:
Hedge fund inflows continue to break records. You don’t even need to be a fund manager to know this one. Inflows to the hedge fund industry have been soaring to new highs of late, and traders have been enjoying the most money they’ve ever had to play with in years.
These markets actually aren’t too bad. They may not be as smooth and trending as those in the 80’s and the 90’s, but today’s markets have been posting swings meaty enough for agile traders. Meanwhile, a tumble in cash returns and a climb in small cap and international stock competitiveness has created a veritable stock-picker’s market — especially in contrast to 2014.
It’s a wonderful time to be in the markets. No matter how bad you’re doing, the world is in an interesting juncture right with commodities hitting rock bottom, China rising, Europe struggling to grow, and the Fed flip-flopping on rates. It may sound bad but it’s one hell of a time to cut your teeth in.
Worst:
“Hedge fund” is still a bad word. With 2016 being an election year, hedge fund managers might as well tattoo “greed is good” on their foreheads right now. Elizabeth Warren, Donald Trump, and a whole host of presidentiables and senatoriables are still taking sight on the industry. And let’s not forget the witch hunts currently raging in China.
The markets are good for your competitors too. Competition within the hedge fund arena is absolutely fierce right now, and industry performance has taken a massive hit because of it. The rise of the liquid alts space isn’t helping hedge funds post higher returns either.
No one really knows what really going to happen. It may be a great time to cut your teeth in but that’s only if you get to survive it. No one really knows what’s going to happen if the Fed decides to lift rates, for all we know Fedmageddon might ensue and volatility will reign. As it is, uncertainty has already reared its ugly head.
Photo: Shaun Wong