Hedge funds portfolios have been “substantially reshuffled” since the UK referendum according to analysts at SocGen subsidiary Lyxor.

Over the course of the summer following Britain’s vote to leave the EU, CTAs - hedge funds using futures contracts - doubled their equity net exposure.

They have also neutralized their commodity positions, with longs in metals offset by shorts in energy and agricultural. 

Dollar shorts have been kept and long positions on Euro bonds have been maintained.

Macro funds remain mildly long equities (but short US indices) and have rebuilt relative trades in precious metals and energy.

They remained unanimously short US bonds and long USD, especially vs. EUR and GBP.

Event driven funds gradually increased risk. Merger funds raised exposure to European deals, and to the technology and communication sectors.

Special situation funds raised their stakes in resources, consumer non-cyclical and technology.

Long/short equity funds mildly raised their exposures. US managers reinforced their stakes in the resources and financial sectors. Their European peers preferred the high yielding stocks.

Lyxor’s hedge fund index has risen 0.7% since the beginning of August, with progress in most strategies, supported by the positive performance of risky assets.

“The Bank of England’s activism and the Brexit timeline getting pushed back contributed toward easing investors’ fears,” said Jean-Baptiste Berthon, a senior strategist at Lyxor.

“Meanwhile, a patient Fed kept the dollar and yields under pressure. Economic releases were mixed but evidenced the resilience of developed market consumers.

“Finally, the recovery in oil prices supported emerging markets assets and credit. While cautiousness remains elevated and trading volumes remain low, better asset returns lifted some pressure off investors’ shoulders.”