Hedge Fund Element Has 2.5% July Gain by Avoiding Volatile Rates
(Bloomberg) -- Element Capital Management climbed 2.5% in July by avoiding wagers on interest rates that burned the macro hedge fund in February -- and some of its peers more recently.
The $15 billion firm, founded by Jeff Talpins, is still down 5.7% this year after losing 7% in February, according to people familiar with its performance. It gained 1% in June.
Other macro funds, including Alphadyne Asset Management and Rokos Capital Management, lost money as U.S. Treasuries rallied in recent months. In June, Alphadyne’s flagship fund tumbled 4.3%, its worst month ever, while Rokos Global Macro plunged 5%, leaving its performance flat for the first half of the year.
Element’s recent gains came from wagers on equities and currencies, according to one of the people. Most every stock index around the globe has risen this year, while the Bloomberg Dollar Spot Index has jumped 2.8% since the start of June.
A spokesman for New York-based Element declined to comment.
Macro funds, which bet on economic events through stocks, bonds, commodities and currencies, are having trouble navigating the twists and turns in interest rates after reporting some of their best returns ever in 2020. This year they’re up about 3% through July, according to industry consultant PivotalPath.
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