The slide in momentum stocks last week and oil's spike this weekend has thrashed hedge funds. Investors want them to stand by their strategies.
Investors like Jon Aikman, who sits on the University of Toronto's endowment and pension investment committees, want hedge funds to"stick to their guns" in times of market turmoil.The markets are causing a panic. But investors are hoping hedge fund managers trust their process and stick to their strategies.one US pension seeing its trend-following funds surrender their August gains in a couple days.
In an email, David Bahnsen, a wealth manager at Bahnsen Group who manages more than $1 billion, said"in times like this, and any other time, our objective with hedge funds is, always and forever, non-correlation." "An absolute return objective is preferred, but we are never looking for our alternative strategies to 'lean into' volatility or momentum, on either side," Bahnsen wrote.
Likewise, another allocator to hedge funds said he doesn't look for managers that"try and be heroes" during times of market stress. One hedge fund manager with total assets in the billions said they try to explain to investors that drawdowns happen in times like these, adding that"it's how you react to market dislocation that makes a fund."
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