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Reuters Survey Shows Favor for U.S., Japanese Stocks

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LONDON (– A group of managers of funds of hedge funds sees U.S. and Japanese stocks performing well over the next three to six months, a Reuters poll shows.

Reuters surveyed 10 fund of hedge funds strategists for their investment outlooks for and asset allocations to the main hedge fund strategies over the second and third quarters of 2006. The managers advised a total of US$74 billion of actively managed allocations to hedge funds.

They predicted above average returns–nearly 4% per quarter for the overall long/short funds sector–though several felt that third-quarter returns would fall slightly to an average return of 3%. This was a more upbeat assessment than in December, when the survey found most managers expecting around a 3% quarterly return.

Across regions, the managers saw the strongest returns from Japanese stocks over the next six months. Indeed, seven of the managers polled expect second-quarter returns on Japanese equities to be 4% or higher. They become more upbeat about the prospects for U.S. stocks in the third quarter, in which half of the ten managers expect returns to be 4% or higher.

The following organisations contributed to the March poll: Auda Hedge LLC; Topiary Fund Management; Dexia Asset Management, EIM, Heritage Bank & Trust, HSBC Republic Investments, Olympia Capital Management, Optimal Investment Services, and Union Bancaire Privee. One contributor was unattributable.

The survey was conducted Feb. 27 to March 10. The next survey will be published in mid-June 2006.

Reuters is the parent company of Lipper HedgeWorld.

Contact Bob Keane with questions or comments at [email protected].


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