SOME PRIVATE FUNDS ARE LIQUIDATING

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A significant percentage of hedge funds in multiple categories, reported net losses at the beginning of the 3rdQuarter. Reported investor redemptions were at 1.5 billion. Prior to the 2nd Quarter of 2018, hedge funds saw significant inflows of assets in 2017. This contrasts with the poor performance many hedge funds experienced in 2016.

Institutional asset management firms and institutional investors are attempting to plan and adjust for the financial turmoil and volatility due to the trade tariffs currently underway. A trade war between the world’s two largest economies has now begun. The Trump administration has made good on its intent to impose tariffs on $34 billion worth of Chinese products.  

This could potentially bring damaging economic effects globally, as well as to companies and consumers in both the United States and China. 

China’s Ministry of Commerce, Zhong Shan said in a statement, that the United States “has launched the biggest trade war in economic history so far.” Due to these tariffs, costs for businesses and consumers are expected to rise, and global financial markets will largely be affected.

Threats of escalating tariffs on China exceeding 400 billion has attributed to many asset managers and institutional investors taking a defensive approach.

Hedge funds with an emphasis in a macroeconomic strategy are likely to be affected the most. 

Those funds with a pure equity strategy, as well as funds with an emphasis within the technology category may benefit from the current trends, resulting from the trade tariffs.