Threats between the US and China with respect to trade and the imminence of a new wave of tariffs prompted investors to rethink their positions due to a risk of escalating tensions. Assets in China and Asia, industrial and resource sectors, as well as export-led stocks, fared worse.
However, the risk premium still seems moderate as investors remain unconvinced that the tensions will degenerate into a full-scale commercial war, explains the Lyxor AM team, which is formed by senior strategists Jean-Baptiste Berthon and Philippe Ferreira. , together with the analyst Anne Mauny.
In this environment, hedge funds were resistant. Thanks to their limited net exposures to that list of assets and their positions in defensive securities, they have become a protection against the risks of a commercial war. This week, strategies focused on emerging markets and distressed assets were the most affected. On the contrary, the CTAsbenefited from their long exposure to Europe
Two thirds of these positions are small or medium-sized companies , and about half are discretionary consumer technology companies. The similarity of these companies is that they operate in commercial segments that undergo structural changes. Most of them need first-line growth or need to cut spending.
“With a supportive environment for business activity in the US, these companies are probably candidates for the sale and acquisition of assets. These catalysts still do not seem to take into account all the factors, as their assessments suggest that, in comparison with the main small and large indices, they are still negotiated at a discount, “the management team believes.
Their main risks are not directly related to world trade or to Italy, they are more sensitive to liquidity. Lyxor estimates that it would take more than 40 business days to leave 5% of the account without disturbing theย
