Are hedge funds a good investment for 2023? A number of experts are weighing in on whether world events like China’s hasty reopening from COVID and falling European gas prices will cause a recession, or if slowing inflation and rising interest rates will correct the problem.
An international survey of 185 investors was inconclusive as to whether or not it was wise to put money into hedge funds at this time, given the instability in the market.
Although commodity trading advisers (CTAs) returned a net of 16% in 2022, many who responded to the survey were not confident that this trend would repeat itself in 2023.
“People are at a crossroads on where to invest their money”, explained survey editor Marlin Naidoo. In 2022, approximately 30% of investors increased their investments in hedge funds, while 20% moved in the opposite direction. According to Reuters, many took investments from hedge funds that traded in stocks in order to invest in hedge funds that traded in bonds. The responses to the survey reflect the different reactions that investors have in the face of all the uncertainty.
Investors might be convinced to continue contributing to hedge funds because they tend to perform better than other investments during times of higher inflation and higher interest rates. But at this point it is anybody’s guess what impact the events of early 2023 will have on the global economy.