Observations:
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Across PivotalPath’s hedge fund universe, 56% of managers have reported positive performance YTD.
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Despite extreme market volatility and high levels of global uncertainty, hedge funds have continued to launch in 2020. The majority of launches have been either Equity Diversified or Equity Sector managers, with an average launch size in excess of $200 million.
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Numerous companies are in the global race to develop a COVID-19 vaccine, and those who are further along in development have seen their stock prices soar in 2020. As a result, we created the PivotalPath COVID-19 Vaccine Developer SMID-Cap Basket to reflect this exposure. This basket includes nine companies below $10 billion in market capitalization that are working on a vaccine. Over the past six months, the basket has skyrocketed as vaccine developments significantly move the needle for these smaller stocks. The basket was up 61.1% in June and 989.8% YTD.
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Tech stocks have been on everyone’s mind recently – they represent the largest portion of the stock market today, have outperformed significantly, and investors have many reasons for buying them. A new reason might be for their defensive characteristics. Tech being defensive contrasts with cyclical companies or sectors, which will typically do worse in a market downturn; these companies typically provide products or services that are considered to be expensive or “nice-to-haves,” that consumers can drop in tough times.