More hedge fund managers are bullish going into 2013 than last year, even as the U.S. fiscal cliff, the eurozone crisis and a potential economic downturn still dominate their biggest worries, according to an annual survey by Aksia.
Among 168 managers with aggregate assets of about $900 billion, respondents were bullish by a ratio of 3-1 compared to 1.3-1 the previous year, according to Aksia's 2013 Hedge Fund Manager Survey published Monday.
The three best-performing strategies expected next year are long/short equity, global macro and equity-focused event-driven approaches. Futhermore, 15% of the respondents predict that Europe will surprise on the upside, while another 13% say the U.S. housing market is likely to do the same and 9% say China's economy will surprise on the upside.
Thirty-two percent say the next bubble is forming in credit and fixed income, while 26% point to developed markets and U.S. Treasuries as a likely source for the next bubble. Another 6% believe the next bubble will be in Asia and China, according to the survey.
“More managers expect China's (gross domestic product) growth to shrink in 2013 than grow,” according to an analysis of the survey, which was conducted in October.
Concerning the eurozone, 73% of respondents believe a Greek exit is more likely than not, compared to 60% a year ago.
“The bullish stance on financial assets appears to discount a number of macro headwinds for 2013,” according to the analysis. “This may suggest that even with the uncertainty over parts of the global economy, managers feel that there is significant stability in the prices of financial assets.”
