- Hedge fund Alphadyne reportedly lost $ 1.5 billion in a bond market contraction, Bloomberg reported.
- The hedge fund slipped 4.3% in June and another 2.5% in July, according to the report.
- Its flagship fund, Alphadyne International Fund, also lost around 10%.
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Alphadyne Asset Management, a New York-based hedge fund, reportedly lost $ 1.5 billion in a bond market short-squeeze as bets on the rate hike turned sour, Bloomberg reported.
The losses, which are among the largest publicly revealed among macro-focused hedge funds, are indicative of the unusual economic environment that characterized 2021 – with inflation numbers at their highest level in a decade and rates of growth. benchmark interest close to zero – and how managers have dealt with such historical anomalies.
Bloomberg points to the flattening of five- to 30-year yield curves in just three days in June, which surprised many people, including Alphadyne. The hedge fund slipped 4.3% to its worst month in history in June when its managers positioned themselves for a steeper U.S. yield curve and higher interest rates, according to the report.
In July, the hedge fund – whose investors include pensions, insurance companies and sovereign wealth funds – lost an additional 2.5%, Bloomberg reported.
Hedge funds have mostly cut bets against Treasury futures as rates continue to hover near all-time lows despite rising inflation.