- Citadel reports a slight profit in 2020 so far despite the Coronavirus driven market crash.
- Goldman Sachs says equity focused hedge funds are 15.5% down on average.
- Citadel launches Relative Value Fixed Income Fund to benefit from market volatility.
Billionaire Kenneth Griffin led prominent hedge fund, Citadel, has succeeded in protecting itself against the Coronavirus driven market crash so far as evident in its Monday’s data that showed the American global financial institution’s flagship hedge fund, Wellington, to have made a slight profit in the year through Monday.
The fund relies on a multi-strategy that includes bets on commodities, bonds, stocks, and a range of other securities. As of Friday, Citadel was reported 5.25% down in March. The source, however, didn’t divulge the exact gain (year-to-date) for the financial institution.
Goldman Sachs Says Equity Focused Hedge Funds Are 15.5% Down On Average
According to the prime services division of the leading American multinational investment bank, Goldman Sachs’ estimate, the hedge funds that focus on equities are 15.5% down on average in March. The year-to-date loss, on the other hand, was forecast at a slightly higher 16% on average for such hedge funds.
The Coronavirus pandemic has weighed heavily on the Citadel’s staunch competitors this year that also rely on a multi-strategy. The main hedge fund of Millennium Management LLC has lost around 4.3% in 2020 while a massive 15% decline in Schonfeld Strategic Advisors LLC in 2020 was also reported.
As per the analysts, it is hard to specify the exact factors that contributed to Citadel’s relatively upbeat performance in 2020 so far. In a recent report, the Wall Street Journal claimed a multimillion-dollar loss for Citadel’s fixed-income portfolio. Citadel, however, regained the unrealized losses within a matter of days.
The source also added on Monday that the firm’s Global Fixed Income fund is currently positive.
Citadel Launches Relative Value Fixed Income Fund To Benefit From Market Volatility
In its recent filing with the U.S SEC (Securities and Exchange Commission), Citadel also highlighted that it has launched a new Relative Value Fixed Income Fund to benefit from the ongoing market volatility.
In the financial crisis of 2008, Citadel’s main funds were drained 55% that also resulted in temporary restrictions over client withdrawals. Ever since then, Citadel has kept its primary focus on risk management.
Citadel was one of the first U.S firms to see the Coronavirus outbreak as more than a Chinese health crisis. Griffin had commented on February 6th at the Economic Club of New York, “It’s not a Chinese health crisis. It is a global health crisis.”