In a year marked by extreme volatility, all four funds of Ken Griffin’s Citadel have reportedly generated double-digit returns.
What Happened: The company’s flagship Wellington multi-strategy fund recorded a return of 2.5% in September, while registering a year-to-date return of about 29%, reported Bloomberg.
The company’s Global Fixed Income fund rose 1.3% last month, taking this year’s return to about 24%, the report said.
Its Tactical Trading fund rose 2.4% in September, boosted by fundamental long-short and quantitative equity strategies, pushing this year’s gain to 21%, added the report.
Citadel Equities gained 2.5% in September, while its year-to-date performance reached about 17%, the report said.
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In comparison, a Eurekahedge Pte index that tracks hedge funds globally has shed 5.7% this year, heading for its worst annual performance since 2008. Similarly, the MSCI World Index of stocks lost 22% this year.
The SPDR S&P 500 ETF Trust (NYSE:SPY) has lost over 20% since the beginning of the year. Bonds have also lost their charm this year as central banks across the world hiked interest rates to rein in inflation. The Vanguard Total Bond Market Index Fund ETF (NASDAQ:BND) has shed over 14% since the beginning of the year.
Why It's Important: Last month, Griffin voiced his opinion on the current economic environment, stating that it is necessary to re-anchor inflation. At CNBC’s Delivering Alpha Investor Summit in New York City, the Citadel Founder said, “Once you expect it broadly enough, it becomes reality, becomes the table stakes in wage negotiations, for example. So it’s important that we don’t let inflation expectations become unanchored.”
Griffin believes it is possible to have a hard landing at the end of 2023.
“Everybody likes to forecast recessions, and there will be one. It’s just a question of when, and frankly, how hard. Is it possible end of ’23 we have a hard landing? Absolutely,” he said according to the report.
The Citadel founder, who started his career trading convertible bonds from his dorm room at Harvard, has also voiced his concerns about the U.K. government losing investor confidence.
“I’m worried about what the loss of confidence in the U.K. represents. It represents the first time we’ve seen a major developed market, in a very long time, lose confidence from investors,” Griffin said according to the report.
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