Tags: Hedge | Funds | Treasuries

Survey: Hedge Funds Gobbling Up Treasuries

Tuesday, 17 Aug 2010 08:30 AM

Hedge fund managers now account for one-fifth of all trading volume in the U.S. Treasury bond market, up from just 3 percent in 2009, according to a comprehensive investor survey by consultancy Greenwich Associates.

The reason? The uptick in government bond issuance and market anomalies caused by quantitative easing have created pricing inefficiencies and have drawn arbitrage traders willing to bet that prices will correct over time, the Financial Times reports.

Global macro funds like Brevan Howard, Tudor Investment and Moore Capital intend to profit from swings in global economic balances, as do some fixed-income arbitrageurs.

Trading in U.S. bonds and rates – the mainstay of many macro managers – has had its ups and downs.

Brevan Howard’s $20 billion master fund lost 2.3 percent during July, and the fund is down just under 1 percent this year.

MarketWatch reports that the hedge fund industry had its second-best month of 2010 in July, but managers lagged a strong rebound in equity markets as many remained cautious about the economy.

"Managers began July with lower than average exposures after significantly reducing gross and net exposure levels during May and June," Lee Hennessee, managing principal of Hennessee Group, said in a statement.

"As a result, hedge funds lagged as equity markets rose sharply."

But China reduced its holdings of U.S. Treasury debt for a second straight month in June while the holdings of Japan and Britain rose, the Associated Press reported.

China's holdings fell by $24 billion to $843.7 billion, a decline of 2.7 percent, the Treasury Department said in a monthly report on debt holdings.

Total foreign holdings of Treasury securities rose $45.6 billion to a total of $4 trillion, an increase of 1.2 percent.

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
Hedge fund managers now account for one-fifth of all trading volume in the U.S. Treasury bond market, up from just 3 percent in 2009, according to a comprehensive investor survey by consultancy Greenwich Associates. The reason? The uptick in government bond issuance and...
Hedge,Funds,Treasuries
284
2010-30-17
Tuesday, 17 Aug 2010 08:30 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved