Global equities long/short hedge funds missed out on most of Wednesday’s massive rally in U.S. stocks, triggered by President Donald Trump’s pause on some tariffs for 90 days, but managed to limit their losses during Thursday’s sell-off.
The funds were up 0.98% on April 9, while the S&P 500 (.SPX), opens new tab index soared 9.5%, according to numbers compiled by Morgan Stanley sent to clients. U.S. hedge funds posted higher gains, up 2.28%, but still underperformed the index.
With a reduced portfolio of long positions – betting prices would go up -, hedge funds did not take much advantage of the rally, but also managed to avoid oversized losses in Thursday’s plunge.
“Some of the activity (on Wednesday) was down to hedge funds covering their shorts after Trump’s 90-day pause announcement,” Jon Caplis, CEO of hedge fund research firm PivotalPath, said.
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