Hedge funds that invest in emerging markets are not heading for a crash, according to research by Cr...
Hedge funds that invest in emerging markets are not heading for a crash, according to research by Credit Suisse/Tremont.
The study showed corporate profits have exceeded expectations and default rates are at their lowest levels.
Credit Suisse/Tremont said recent moves by major industrialised nations to continue raising interest rate movements have led to growing beliefs that the long period of low cost financing is nearing an end and US growth is slowing down.
The research showed the environment remained healthy, despite many hedge fund observers questioning the stre-ngth and duration of the current emerging markets' bull run.
Despite the downturn in performance experienced in May 2006, the HEDG Emerging Markets index gained 17% on an annualised basis with a volatility of 7.6% during the 36-month period ending Nov-ember 2006.
In addition, performance was better for hedge funds than traditional equities in the May sell-off period. The HEDG Emerging Markets index experienced a 5% decline for the month, while the MSCI Emerging Markets index fell 10.8%.
Credit Suisse/Tremont said hedge funds that have focused on emerging markets have grown more than tenfold from $32bn (£16.5bn) between October 1998 and November 2006.
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created