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Hedge fund managers are divided over an airline recovery in 2021

Trading platform, IG Prime, published a white paper laying out the views of 253 hedge fund managers, on which sectors are most likely to grow over the next twelve months.

Within the 41-page document, titled ‘Hedge fund trends: Covid-19 vs the global financial crisis’, 73% of those surveyed said that health and pharma will increase in value – making it hedge fund managers’ top ranked sector for growth over the next year. This, the report states, should come as little surprise given the attention and resources thrown behind COVID vaccine candidates, as well as treatments and PPE.

Similarly – and perhaps surprising to some – the airline and travel sectors ranked as the third most likely sector to grow during 2021, within 50% of hedge fund managers and 82% of UK investors backing a resurgence in the pandemic-suffering sector.

With EasyJet recording a 200% increase in flight and holiday package searches over the Christmas period, the easing of travel restrictions should provide a boost over the year-to-year transition period – though the longevity of these relaxed measures remains to be seen.

IG said that financiers’ outlooks were largely positive, with 52% of hedge fund managers and 94% of UK investors surveyed saying that it was ‘very unlikely’ that COVID will affect their funds’ performances over the next ten years.  

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Other noteworthy stances include a 66% positive outlook for digital tech – with many questioning the sustainability of this year’s surge in tech growth equities – and a 15% positive prediction for oil – as OPEC said manufacturing demand for oil would not recover until at least mid-2021.

Here is the full list of hedge fund managers views on the likelihood of an increase in value over the next 12 months will be for the following sectors:

Health and Pharma – 73%

Digital Technology – 66%

Airline/Travel – 50%

Financial Services – 46%

Retail – 40%

Real Estate – 38%

Automotive – 36%

Cryptocurrencies – 23%

Precious Metals – 18%

Indices – 17%

Oil – 15%

Forex – 13%