Outlook for Capacity of Current Strategies | ||
Strategy | Current situation Acceptable | Outlook |
Aggressive growth | Good | Acceptable |
Emerging markets | Good | Acceptable |
Futures | Good | Good |
Macro | Good | Good |
Market neutral | Good | Good (with Europe included) |
Multi-stategy | Good | Good |
Opportunistic | Good | Acceptable |
Special situations | Good | Good |
Value | Good | Good |
Strategy | Moderately Stressed | Outlook |
Fixed income arbitrage | Narrowly defined strategies – stressed | Some relief in non-US markets |
Broadly defined strategies – acceptable | ||
Income | Narrowly defined - close to stressing, depends on strategy | Acceptable with new instruments and strategies in US and non-US markets |
Merger/risk arbitrage | Stressed but will recover somewhat with economy | Acceptable to good |
Distressed securities | Good, starting to be under some pressure in US | Good opportunities in Europe |
Strategy | Stressed | Outlook |
Market timing | Virtually dead in US for local reasons Alive offshore | Acceptable outside US |
Pure short selling | Acceptable to stressed, depending on manager | Difficult due to nature of strategy |
Statistical arbitrage | Stressed | May be acceptable with non-US markets |
Convertible arbitrage | Stressed, improving | Some relief in non-US markets |
Source: Van Hedge Advisors |