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Alternative Strategies vs Interest Rates

Similar performance – coincidence or causation?

Nicolas Rabener
10 min read
27 Jul 2026

SUMMARY

  • CTAs & equity market neutral funds have benefited from rising rates
  • However, they don’t exhibit interest rate-sensitivity per se
  • Rather, the lack of trends and negative investor sentiment were detrimental

INTRODUCTION

What is the right benchmark for a hedge fund? The answer depends on the strategy, but for truly uncorrelated strategies, it should be at minimum the risk-free rate – typically proxied by short-term government bonds.

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