Brevan Howard Doing Well Amid Current Financial Uncertainty

New Jersey-based Brevan Howard Asset Management is riding the storm of the coronavirus outbreak in excellent shape, predicting that March could be its best month since it was founded in 2003.

The firm’s flagship macro hedge fund, Brevan Howard Master Fund, saw a rise of 17% during the first three weeks of March, adding up to a yearly gain, so far, of 21.6%. Previously the company’s best month was in January 2008, during a different financial crisis, caused by the collapse of the housing market. During that month the company returned just short of 10%.

The recent success of the fund marks an about-face for the fund which has been struggling with shrinkage from a peak of close to $28 billion in 2013 to $3.3 billion today.

The fund is among macro hedge funds that focus on developed markets that are seeing good returns lately after years of blah performance. Gains this year are from investments on fixed-income markets, the climbing dollar, and gold. Shorting stocks during the pandemic has also helped enlarge these funds. The overall gain for these types of funds has been about 1.2% during the first two months of 2020.

Weinstein’s Saba Management Weathering Storm Well

So far, Boaz Weinstein is feeling pretty good about the performance of Saba Capital Management LP. So far his 2020 returns are posting 67% gains. During the first two weeks in March alone the fund rose by a supersonic 33%.

His nicknamed “doomsday fund” better known as Saba’s Tail Fund, designed to score when the market is tanking, did considerably better than Saba Capital, with growth at 99% just in March, and total growth of 175% for the year as a whole.

Weinstein told his investors in a letter that although he was surprised that the impetus for the market’s extreme volatility was a virus, he was always sure that “investors need to be ready for an extreme market decline.”

Saba was founded in 2009 out of Deutsche Bank and is headquartered in New York. The fund manages about $2.2 billion.

Stocks Funds Love

One way to appraise whether a stock has the potential to bring the returns investors want to see is to consider where the best investors in the business put their money to work. Luckily for us, hedge funds, which are usually managed by some of the smartest and most successful investors around, are required by law to publish all the stocks they own in a filing called 13-F that they must submit to the Securities and Exchange Commission.

Most hedge funds invest in numerous different companies in order to minimize risk through diversity. But it is easy to see which stocks those managers like the best by scrutinizing which are at the top of their list in terms of percentage of managed assets.

Here is a list of the 5 favorite stocks right now of the hedge fund sector, in order from best-loved on down.

  1. Apple Inc.: Over 3200 funds hold Apple stock, and way over half of those include it in their top 10 holdings. Last quarter almost 16% of funds moved Apple into its top ten stakes.
  2. Microsoft Corp.: Almost 3300 funds include stock in Microsoft, with about 1650 of those placing Microsoft in its top ten investments. Among hedge funds, in particular, Microsoft is the favorite stock. Last quarter over 6% of funds added Microsoft to its top ten investments.
  3. Amazon.com Inc.: Less popular than Apple or Microsoft, Amazon is still beloved by about 2900 funds with 840 of those holding Amazon in its top ten. About 3.5% of funds moved Amazon into its top ten holdings.
  4. JP Morgan Chase & Co.: A little less popular than Amazon, JP Morgan Chase is held by a total of 2775 funds, with 746 putting this financial services company in its top ten holdings. This quarter was especially nice for JP Morgen, with 14.6% of funds moving it into its top ten tier of investments.
  5. SPDR S&P 500 ETF Trust: This is not really a company, but rather an electronically traded fund, a kind of investment that has recently been gaining in popularity. It is held by 2321 of all funds, with 701 placing it in their top ten holdings. A nice 16.2% of funds moved this ETF into its top ten investments.

In case you were worried where Google (Alphabet) went to, it is in the sixth position of beloved investments. Although a lot of funds live Alphabet, finding a home in 2750 funds, only 609 hold Google in its top ten investments. About 13% of funds brought Google into its top ten favorite holdings.

Hedge Fund TCI to Demand More Green from Companies

An unlikely investor is taking drastic steps to bring sustainability to his portfolio. Sir Christopher Hohn, the British head of the New York hedge fund TCI, will use his $30 billion worth of influence to demand that the companies in his portfolio disclose their carbon footprint and reduce their use of fossil fuels and greenhouse gas emissions. Hohn says if they don’t, he will, “oust their boards or dump their shares.”

Hohn is a major contributor to Extinction Rebellion, and activist group through which he will be able to invest funds from TCI Fund Management in sustainable businesses.

Currently, not all Hohn’s investments are particularly environmentally friendly. TCI has a stake in a Spanish company called Ferrovial which is an airport operator one of whose airports is London’s Heathrow. Ferrovial also owns Aena, another company that runs airports. Airplanes are one of the world’s major contributors to climate change with 2% of all emissions of carbon worldwide.

Hohn is less interested in divesting than he is in persuading companies to take a more responsible course when it comes to global warming and sustainable business practices.

Some of TCI’s portfolio companies include Moody’s, Google, Charter Communications, and Canada Pacific Railway. Hohn said that if these companies do not disclose their environmental impacts, he will have TCI “vote against their directors.” He stated that he will encourage asset managers to dismiss fund managers who will not adhere to these recommendations to be transparent about their carbon footprints.
“Asset owners should fire asset managers that do not require such disclosure,” Hohn explained.

Bridgewater’s Dalio Looking to Golden Lifeboat

Traditionally gold is where investors park their money in troubled times, such as inflation or a rocky stock market. But with inflation low and the market reaching historic highs, why would Ray Dalio, the superstar hedge fund manager of the world’s largest hedge fund, Bridgewater Associates, recommend a move to gold.

Dalio is predicting that gold will surge by 30%, hitting even higher than $2,000 for one ounce. He sees three reasons why this startling growth is a strong possibility for the near future:

A change in direction of the Federal Reserve: Despite lowering interest rates three times in 2019, co-CIO Greg Jensen says the Fed and other central banks will keep interest rates down, even if inflation goes past the stated target values. Others have different worries about the Federal Reserve. They fear the Feds are intervening in a dangerous way with the repo market. Bridgewater recommends gold to protect their investments in case the US dollar becomes the world’s reserve currency.

Brewing turmoil in China and Iran could lead to unstable economic conditions worldwide. When markets are risky, gold rallies as investors bale from risky assets and put on their golden life preservers.

Political turmoil is not just something that happens far, far away. With a contentious US election rearing its head just beyond the horizon, the USA might be in for some bumpy rides. There could be a strong reaction to a Bernie Sanders nomination in the stock market as investors worry about how Sanders’ policies could affect the economy and business world. Once again, gold acts like an oasis in a desert of uncertainty.


Bridgewater sees trouble a foot just below the surface of the country’s longest expansion in its history. The political climate could easily interfere with the economic climate, making gold a safe bet in troubled times.

Hedge Fund Investments: A Guide for Retirees

When it comes to investing in funds, retirees have different criteria to those taking home a regular salary.  While it may seem at first glance that this would be disadvantageous for investment opportunities, there are actually some benefits to this new life status.

According to retired accountant Michelle Flores, when one is retired they often have a stack of money that they are not touching.  They have finished paying off their mortgages, are likely to have adult kids who are less dependent on them and are thus building up regular savings.

Given that many hedge funds make investments in the property industry, they tend to require a long-term investment which is easier for retirees.

“When you think about it, making investments – especially those that require you to have your money locked in for a set time – is a great opportunity for pensioners with liquid capital,” says retiree Moshe Victor Keinig. “Lock-up periods – which provide less flexibility than traditional EFTs and require at least 12 months – is very beneficial to pensioners given that they tend to offer greater returns.”

One tool that has been created for pensioners looking into investments is the Retirement Planning Calculator created by Personal Capital.  This offers a way of checking likelihood of success for retirees through the analyses of multiple algorithms.  This free online tool is a great way to manage wealth for all pensioners.

First Compliant Cryptocurrency Hedge Fund Opens in Asia

The Circle Fund, with teams of investors in Shanghai, Hong Kong and New York, is the first Asian cryptocurrency hedge fund to be compliant with global regulations. The company behind the fund is made up of people with over five years of experience in the primary and secondary blockchain industry markets.


The investors involved in the Circle Fund are highly experienced in trading securities, commodities and currencies. They work with clients in North America and in China. The fund has been completely audited and is fully compliant with several industry authorities, such as the Cayman Islands Monetary Authority, Triple Leo Consulting, Signature Bank, Coinbase Custody, InVault Trust and KPMG.


The team at Circle Fund works with entities in both China and America, such as large exchanges, media companies and venture capital and blockchain investment managers. The look for projects which they believe will bring long-term value to the blockchain universe and also provide maximum returns.

Parplus Fund Has No Management Fees

James Carney, founder of Parplus Partners, says his fund will never take a management fee. He will, instead, charge his clients a performance fee when and if his funds surpass the S&P 500 stock index.


“Eat what you kill. That’s what I’ve been doing for 34 years,” said Carney, who is also the fund’s CEO.


Parplus was founded in 2017, but only began to accept outside money last summer. The firm manages about $500 million worth of assets, so if it had indeed charged the average management fee of 1.27 percent last year it would have made about $6.4 million on that fee alone.


The firm runs a volatility strategy which strives to protect investors during downturns in the market. Carney was previously a proprietary trader who led Royal Bank of Canada’s volatility team. He explains that he is sure that his model will be successful. He says the huge size of the opportunity in volatility trading will almost guarantee success, especially since banks have mostly left this niche during the past ten years.


Carney said that as a proprietary trader he was only paid based on the profits he made. He does not see any reason why hedge fund managers should have such a different model.


It is true that the company will not get paid anything if they equal of fall short of the S&P 500’s performance, but when Parplus does succeed, their performance fees are much higher than those of the average hedge fund, taking about one-third of the profits off the top, compared to the average performance fee of 15 percent.