No systemic threat from hedge funds, says ASIC
Australian hedge funds do not pose a systemic risk to the Australian financial system right now, a report from the Australian Securities and Investments Commission (ASIC) has claimed.
Although wholesale investors are the main users of hedge funds, investments are small compared to total investments — which reduced systemic risk, ASIC said.
Leverage at an average gross market value of 1.51 times net asset values in 2012 was not a problem ASIC said, and funds had enough liquidity to manage their obligations - ninety-two per cent of surveyed funds' portfolios could be liquidated in 30 days.
While creditors could demand 99 per cent of fund liabilities in less than 30 days, funds' ability to suspend redemptions meant this was unlikely to impact systemically.
The year's redemptions were also deemed to have little impact due to size relative to net asset values.
ASIC said listed equities were hedge fund managers' biggest exposure — 32 per cent were held in Australian-listed shares — and assets represented only a small portion of Australia's $2.1-trillion managed funds industry as most funds hold less than $50 million.
The survey, which assessed 12 qualifying hedge funds representing approximately 42 per cent of assets in single-strategy hedge funds in Australia, was indicative of the entire Australian, market according to ASIC.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The structural shift towards active ETFs will reshape the asset management industry, according to McKinsey, and financial advisers will be a key group for managers to focus their distribution.
ASIC has warned that practices across the $200 billion private credit market are inconsistent and, in some cases, require serious improvement.
A surge in electricity prices has driven the monthly Consumer Price Index to its highest level in a year, exceeding forecasts.
Infrastructure well-positioned to hedge against global uncertainty, says investment chief.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
215.17 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
118.15 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
75.00 3 y p.a(%)
4
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
61.11 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
60.93 3 y p.a(%)
