14/01/2011 - Beta 2 Outperforming Hedge Funds
Beta 2 Limited, a forex investment boutique, compare their performance and the returns for their clients against Hedge Funds in 2010.
At the start of every year performance results are released for hedge funds for the previous year.
According to Reuters this performance was disappointing to say the least. Reuters stated that hedge funds returned an average of just 4.52% in 2010 according to Hedge Fund Research's HFRX Index. (full article uk.reuters.com/article/idUKLNE70300R20110104)
Hedge funds claim to offer strong returns that are not correlated with broader markets, but in 2010 many failed on both of these points.
With the poor performance came a very close correlation with each other and the market as a whole.
There were some outperformers including LNG Europa Credit Fund with 76.8% and Cheyne Capital European Event Driven Fund with 19% but overall it was a year of low performance. Another report last week from Bloomberg suggested their survey of hedge funds performance resulted in the average hedge fund returning 7% last year.
Beta 2 Ltd, a City Investment Boutique who offers an advisory trading service to HNW individuals and institutions may provide an alternative to these funds. Managing Director Lane Clark had these comments on the current market performance: "We have the utmost respect for all funds, and their abilities to yield consistent returns, but we believe these returns are unsatisfactory particularly given the fact that the funds and their performances seem to move in line with the general market.
Our advisory clientele outperformed the yearly returns of most funds and in quarter four alone our clients were up between 4.4% and 27.9%, with the average being 13.9% return on quarter 4.
Although we believe this is a period of over performance, we're very confident for 2011.
We believe we offer investor’s exposure to the new breed of trader. Traders whose trading strategies have been refined by working in an era of volatility and uncertainty. The systems we employ across the board are very robust, and pending the clients investment expertise we allocate them a risk rating between 1 and 10 (ten being very high risk) when facilitating a trading account for them. We trade multiple positions with what we term as both core and secondary positions, but most importantly of all - we always attempt to have a portfolio composition that is well hedged.
When trading switched from floor trading to electronic trading, many traders struggled. When electronic trading was faced with the increased volatility created by the credit debacle and worldwide recessions - traders struggled, but as a young and dynamic operation these climates helped us refine our systems to perform regardless of the market climate.
As I stated earlier we have respect for every organisation who operates in the investment markets, but having respect doesn’t mean we won’t attempt to outperform these establishments. We can not guarantee returns, but we believe our trading systems can compare favourably against the best funds, and we will attempt to continue to achieve the objectives of most funds which they currently seem not to be achieving - which is superior performance and a lack of correlation with other asset classes.
Director of Trading at Beta 2, Jovi Overo added “As the transition from floor trading to electronic trading evolved the average return of hedge funds between 2000 and 2007 yielded 7%. Since this period we have seen volatility increase and in many cases, performance turn negative. Last years return for funds in my opinion was poor and this is why we have much confidence when looking forward to 2011. Although we do not offer a fund for investors to invest into, we offer a service that is tailor made to their exact risk parameters, and in this current climate I believe clients can see the benefit of that”.
About Beta 2 Limited:
Beta 2 Limited are a Foreign Exchange and precious metals advisory trading organisation based in the City of London. Founded in 2007, the Beta 2 Forex advisory service has continually strived to provide high-net worth individuals, speculators, corporations and institutions with high quality investment advice. Beta 2 Ltd is an appointed representative of Park Caledonia Associates Ltd which is authorised and Regulated by the Financial Services Authority. FSA Reg. No.475922.Company Reg. No. 6430966.
For more information on Beta2 submit your request via our website here.
Beta 2 Limited Hillgate House 26 Old Bailey London EC4M 7HW T: +44 (0)20 7429 2727 F: +44 (0)20 7429 2701
Disclaimer
This material is not an offer of any services or an offer to enter into any agreement with us. Beta 2 Limited provides its services exclusively under an agreement with the client subject to the applicable legislation. By submitting this material Beta 2 Limited does not represent or warrant and does not accept any obligations (whether expressed directly or indirectly)in relation to rendering any services, the quality of the services, or their applicability for the specific purposes and objectives of this material recipients.
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