Why This $1.6 Billion Hedge Fund Is 50% In Cash…”40 to 60 percent downside for global stocks…”

Sunday, September 4, 2016
By Paul Martin

by Tyler Durden
ZeroHedge.com
Sep 4, 2016

“The whole world is wrongly positioned,” warns Norwegian hedge fund firm Sector Asset Management’s founder Peter Andersland, “the common denominator for everything is the long duration — real estate, stocks, bonds. Everything is much more rate sensitive now.”

As Bloomberg reports, Andersland’s $1.6 billion holds as much as 50 percent in cash in one of its funds, because holding cash is the best protection against bond and stock markets inflated by record monetary stimulus.

“What can kill us now?,” Peter Andersland, the 55-year-old founder of Sector, said in an interview on Tuesday at his office overlooking the Oslo fjord. “It’s the correlation between stocks and bonds that will be induced by higher rates. That’s the biggest risk in the capital markets today, not geopolitics or Trump.”

Massive central bank stimulus with below zero rates and quantitative easing has led to increasingly dysfunctional markets, with even the negative correlation between stocks and bonds breaking down. As we have noted previously, they are now largely moving in the same direction as markets have become more driven by central banks, leaving investors with no place to hide.

The Rest…HERE

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