Discretionary Macro Most Popular Investor Strategy: Survey
Posted by Colin Lambert. Last updated: February 25, 2024
A survey has found that Discretionary Macro remains the top strategy for institutional investors, reinforcing recent data indicating that 2023 was a better years for these funds compared to their systematic brethren.
Societe Generale’s prime services unit’s most recent poll of nearly 370 global investors, conducted in the final quarter of 2023, surveyed pensions, endowments, funds of funds and other institutional investors about their hedge fund allocation priorities over the next year, and found half of investors plan allocations to Discretionary Macro, albeit slightly down on the 51% in the previous survey.
“The top strategy among institutional investors for 2024 is Discretionary Global Macro,” says David Regan, CFA, CDDA, director of capital consulting at Societe Generale. “This is the fifth survey running that asset allocators have chosen this as the strategy most likely to be increased in their portfolio over the next 12 months.”
Two other strategies, Equity Long/Short and Equity Market Neutral, retained their ranking within the top five as compared with the Spring 2023 survey. The two largest changes to the upside in strategy interest were Commodities (+11%) and Equity Long/Short (+5%) compared to the previous report.
The survey also found that other considerations, like ESG and D&I continue to be relevant themes for investors.
“These insights show the continued interest in adding diversifying strategies to institutional investment portfolios,” says Regan. “This is corroborated by the significant number of introductions our global team has made for these strategies over the time period covered by the survey and starting this new year.”
Data released last month from hedge fund analytics firm HFR found that investors actually reduced their exposure to Global Macro strategies in Q4. HFR reported that systematic strategies saw an outflow of $16.6 billion in Q4 2023, while the overall exodus of funds from Global Macro was actually only $12.2 billion – suggesting that fundamental or discretionary strategies had picked up assets.
On a related note, data from BarclayHedge’s CTA Index, found that discretionary traders earned 2.23% in 2023, while systematic CTAs saw a decline of 0.9%.
