Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Hedge funds investing in Eastern Europe face worst results in eight years

Economy Sep 15, 2022 12:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A skyline of skyscrapers is reflected in the Vistula river in the evening in Warsaw, Poland August 22, 2022. REUTERS/Kacper Pempel

By Nell Mackenzie

(Reuters) - Hedge funds trading Eastern European stocks and bonds are seeing their worst performance in eight years, weakened by the surge of global inflation, the strength of the U.S. dollar and the war in Ukraine, the BarclayHedge Eastern European index shows.

The index, which tracks the performance of hedge funds trading stocks and bonds in the region, has dropped by 22.65% from the start of 2022 to the end of August, the index compiled by the data provider BarclayHedge shows.

This puts it on track for its worst performance since 2014.

Another index by the same data provider, which follows fund managers trading only stocks in Eastern Europe, is down even further, by almost 32% over the same time period.

An MSCI EM Eastern Europe ex-Russia index that trades in euros is down just over 30% year-to-date, underperforming wider emerging market equities as well as global stocks benchmarks. The MSCI International EM Price Index is down 22% and the MSCI All Country World Price Index is down 20%.

The dollar's surge to 20-year highs in the face of soaring inflation and aggressive rate hikes from the Federal Reserve have caused pain across the world. It draws funds back to U.S. assets and pushes up the cost of imports as local currencies weaken against the dollar.

"There’s a difficult combination of factors occurring in that part of the world right now," said Ben Crawford, vice president of research at BarclayHedge. "The smallest threat that the war might cross into the other Baltic states makes investors nervous to take on exposure to these markets."

Since the outbreak of war in Ukraine, the number of funds BarclayHedge tracks in the region has fallen to just 15 from 43 since the start of the year, the data provider said.

One portfolio manager at a fund with over $100 billion under management said the stock prices of companies in Eastern Europe stood no chance against the rise in the dollar.

Stock prices tumbled across Europe on Wednesday after higher-than-expected U.S. inflation this week foreshadowed another significant rate hike by the Federal Reserve.

Hedge funds investing in Eastern Europe face worst results in eight years
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email