We use cookies to track usage and preferences. See Cookie Policy
Pocketmags Digital Magazines
AU
Pocketmags Digital Magazines
   You are currently viewing the Australia version of the site.
Would you like to switch to your local site?
Digital Subscriptions > The Hedge Fund Journal > February 2017 > Algebris Macro Credit Fund (UCITS)

Algebris Macro Credit Fund (UCITS)

Alberto Gallo says RIP to ZIRP, NIRP and QE
Fig.1 Comparison with peers - ITD returns
Source: Algebris (UK) Limited, Bloomberg

Investors seeking exposure to fixed income and credit can select from a wide variety of strategies and vehicles, ranging from passive index-tracking products, such as ETFs, to benchmark-conscious long-only funds, absolute return funds, total return funds, hedge funds, structured credit vehicles and even private equity funds.

Algebris manager Alberto Gallo argues that “a relatively unconstrained approach, with flexibility to express macro views and invest long or short across a wide range of liquid rates and credit asset classes, is essential for the macroeconomic and financial market landscape of early 2017 where government bonds offering very low or negative yields are clearly a source of huge negative convexity.”

Indeed, Gallo’s UCITS fund, which has so far raised $400 million, is up 5% since inception in July 2016 and has already profited from a core 2016 theme of shorting government bonds, before rotating to reflation trades this year. He thinks that a traditional, long-only, benchmark-constrained strategy (that can only over-or under-weight sectors or securities) would be a straitjacket. Such semiactive strategies, subject to tight tracking error constraints, have been dubbed “closet trackers” and face competition from passive tracker products, such as ETFs, which Gallo views as “cheaper, but vulnerable to herd behaviour and low returns.” Therefore he envisages that “only low-cost or genuinely active strategies with many degrees of freedom over asset allocation and security selection will survive.” Performance to date, versus peers identified by Algebris, is shown in Fig.1.

A melting pot of ideas

READ MORE
Purchase options below
Find the complete article and many more in this issue of The Hedge Fund Journal - February 2017
If you own the issue, Login to read the full article now.
Single Issue - February 2017
$179.99
Or 17999 points
6 Month Digital Subscription
Only $ 150.00 per issue
SAVE
17%
$749.99
Or 74999 points

View Issues

About The Hedge Fund Journal

Informing the Hedge Fund Community. With access to some of the industry’s biggest names and an astute and talented group of writers and contributors, The Hedge Fund Journal has established itself as a trusted source of information on the hedge fund industry.
Ways to Pay Pocketmags Payment Types
At Pocketmags you get Secure Billing Great Offers HTML Reader Gifting options Loyalty Points