Greenwich Alternatives Investments Essay Example

Greenwich Alternatives Investments Essay Example Greenwich Alternatives Investments Essay Greenwich Alternatives Investments Essay Overall, the total return of the SP 500 TR Index may be greater than the Opportunistic but the risk of the index is much higher than the Opportunistic. Furthermore, the April 2012 return of the Opportunistic was greater than the SP 500 TR Index, so the Opportunistic is the best method for investors. Secondly, the following part will examine and make a comparison of the total return and the risk between the Macro strategy, the SP 500 TR Index and the FTSE 100 Index. The chart 4 shows the deference of the total return of April and March 2012, YTD, 3 month and 1 year between the Macro, the FTSE 100 Index and the SP 500 TR Index. Chart 4: The total return of the Macro, FTSE 100 Index, SP 500 TR Index Source: Greenwich Alternatives Investments8 According to the chart, the April 2012 return of the Macro was 0. 8% greater than both the indexes. Furthermore, the March 2012 return of the SP 500 TR Index was the highest with 3. 3% compared to -0. 7% of the Macro but the total of the FTSE 100 Index was the smallest at -1. 8%. If almost of types return of the Macro were bigger than the FTSE 100 Index, there was a change with the YTD return. In addition, the YTD of the Macro was 2. 6% while the rate of FTSE 100 Index got 3% and the highest YTD return was belong to the SP 500 TR Index with 11. 9%. The 3 month return of the Macro was 1. 3% less than the amount of SP 500 TR Index with 7. 1% but it was taller than the FTSE 100 Index (1%). The 1 year return of the Macro was lower than the SP 500 TR Index again when it was 0. 7% compared to 4. 8%. However, there was a huge decrease of the FTSE 100 Index over the same period as it got only -5. 5%. In order to have an overview of the risk of the Macro, the FTSE 100 Index and the SP 500 TR Index, the chart 5 illustrates the standard deviation of 3 and 5 year annualised. : The rate of the Macro is the smallest compared to both the indexes. In addition, the 3 year annualised standard deviation of the SP 500 TR Index and FTSE 100 Index are 15. 6% and 14. 7% much bigger than the Macro with only 3. 8%. Moreover, the 5 year annualised standard deviation of the Macro is 4. 8% while the rate of the SP 500 TR Index and FTSE 100 Index are 19% and 17% over the same period. Therefore, the investors can reduce the risk with the Macro strategy. Chart 5: The Standard deviation of 3 and 5 year annualised of the Macro, FTSE 100 Index, SP 500 TR Index Source: Greenwich Alternatives Investments9 Overall, almost historic return of the SP 500 TR Index were greater than the Macro but the investors could choose the Macro strategy in the future to invest because the April 2012 return of the Macro increased clearly and the risk of the Macro is lower. All hedge fund strategies have different advantages but they allow investors developed their portfolio variegation profits. The strategy weights show the average of each hedge fund strategy in the portfolio. The percentage of the Macro strategy on March 2012 is 8. 2% (takes around 31. 17% in the growth of the Directional Trading Group) when the development of the Opportunistic is 8. 5% on the same period (occupies approximately 21. 63% in the percentage of the Long-Short Equity Group). However, the investors have to face some risks with strategies. For example, some macro problems can produce risk for the Macro. More specifically, the changes in global economies will impact to the governments policies; therefore, the interest rate will have modification. As a result, it affects all majors in the market, such as, bonds, equities. The movement increase the risk of the Macro. Furthermore, the IPOs events, hostile bids and other event-driven opportunities can impact to the Opportunistic because the events make an interim earnings disappointment. Hence, the investors can lose their trust and the Opportunistic have a lot of risk suddenly. In conclusion, there are many methods that investors can develop their portfolio, such as, the hedge funds strategies, some indexes but it is not easy to choose the best investment way. In order to make decision, the investors need to make a comparison of the historic returns and the risk of all methods. It can help them predict the trend of markets, minimize the risk and look for the best opportunity. In the paper, the historic returns of the two hedge fund strategies are not really greater than the SP 500 TR Index and FTSE 100 Index but their risks are much lower than both the indexes. Therefore, in my opinion, the investors should use the hedge fund strategies because they can decrease risk more strongly than the indexes.