Hedge Fund Up 21% Sets Sight on Fed to Supercharge Returns
- AE Capital’s systematic strategy based on tracking asset flows
- Balance-sheet unwind to fuel currency swings, CI0 says
For the better part of a decade, global macro hedge funds have struggled to make money, complaining that central-bank policies have crimped volatility. That makes AE Capital’s success even more impressive.
The firm, which manages about $300 million in foreign-exchange strategies, relies on computer algorithms to track asset flows and identify currencies ripe for swings in sentiment. This year, wagers on the Canadian and Australian dollars versus the greenback have paid off handsomely, with returns in the Fully Geared Systematic FX Fund, its largest, topping 21 percent through mid-September. That’s after gains of 20 percent last year and 56 percent in 2015, and compares with returns of less than 1 percent for global macro funds broadly, according to Hedge Fund Research.