NASHVILLE, Tenn. (HedgeWorld.com)–A survey of macro hedge fund managers found a majority of them bearish in their outlook for the October performance of U.S. equities, the dollar and 10-year Treasury notes. It was the first time since the survey was started in March by Van Hedge Fund Advisors International LLC that the respondents took a pessimistic view in all three indicator categories for the month.
The survey results, issued by the company as the VAN Macro Sentiment Indicators, are based on the outlook of hedge fund managers with a combined total of about US$33 billion in assets under management.
For October, 57% of managers express a bearish view of the U.S. dollar, up from 48% in September and from 29% in August, when 54% were bullish on the currency.
Just 22% percent are bullish toward the Standard & Poor’s 500 stock index for October, down from the 39% percent who had an optimistic view for August, while 56% percent take a bearish view in the most recent poll.
For Treasuries, 52% are taking a bearish view for the current month, up from 38% in the September survey.
The monthly VAN surveys poll the same group of between 25 and 30 mostly traditional macro fund managers, with some long/short equity managers using a macro overlay strategy, said John Van, chief financial officer for the company. He noted that the results capture the sentiment of managers at the beginning of the month and said that many could change their positions later in the month, depending on their strategies. “These are very short-term,” Mr. Van said of the results.
He said that he has been noticing some running themes in the 2004 sentiments. For the S&P 500, he said, “the same factors have been driving the market–the upcoming U.S. elections, the Iraq situation and the price of oil.”
With 10-year Treasuries, Mr. Van said, “There’s certainly the expectation that rates will go up, negatively impacting prices.” The mostly negative outlook for the dollar can in part be explained by the view “that the dollar has become less of the bellwether currency when there is a so-called flight to quality,” he said, adding that the euro and the Swiss franc have taken on more of the safe-haven role.
Contact Bob Keane with questions or comments at: [email protected].