Omni Partners Macro Fund has been struggling in the year so far, with a loss of -1.23 percent in November and overall return for the year of only 1.40 percent. The hedge fund lost in its short position in DAX index versus long in Gold, long in Gold versus short in Silver, and long US dollar and Hungarian forint. The gainers were longs in USD and Yen, long USD and South African Rand, and a short position in UK Gilts.
The fund defends its short position in German DAX index by citing its concentration in cyclical exposure, large cap companies, and export based businesses. The German economy is highly correlated to growth in Europe, so the fund is bearish on Germany’s main index. The largest companies in the DAX index depend on export of automobiles, chemicals, and other industrial items, and the export sector is particularly affected by a slowdown in the euro-zone The fund managers recognize that German bonds hold value, but the same cannot be said for Germany’s flagship index.
On the issue of the fiscal cliff, the fund thinks that the crux of the matter is the extent of fiscal tightening that is executed at the end of fiscal cliff saga. When the aim is to keep GDP growth in the range of 2 percent, a tightening in fiscal policy could very well result in negative growth in the first quarter of 2013. The commentary also notes that various economic indicators, like initial jobless claims, Philadelphia Fed Business Conditions index etc, have already lowered.
What does value investing really mean? Q1 2021 hedge fund letters, conferences and more Some investors might argue value investing means buying stocks trading at a discount to net asset value or book value. This is the sort of value investing Benjamin Graham pioneered in the early 1920s and 1930s. Other investors might argue value Read More
The fund attributes the downward performance to S&P 500 and other equities that ended the month more or less flat last month. These stagnant returns also stalled any appreciation in the currencies which did not change more than 1 percent in value in November.
Omni Macro Fund’s AUM is $287 million, while the firm’s total assets are above $1 billion.