A Hedge Fund Predicted The Impact of Coronavirus And Made A 40 Percent Gain

Gene Naumovsky

Dymon Asia Capital looked to alternative data to understand COVID-19's next step, and profited hugely.

A Bloomberg report shows how one Singaporean hedge fund predicted the novel coronavirus’s effects on the market, according to Markets Insider. Dymon Asia Capital shorted the S&P 500 and posted a 40% gain. The $2 billion fund placed bets on the market crashing based on data from “alternative data,” such as search engine records, Chinese road traffic, test kit availability, and flights.

Danny Yong, Dymon’s investment chief, told Bloomberg, “It was clear the market was underpricing the impact of COVID-19.” Yong also told the Financial Times that Dymon bet on the rise of bonds and the fall of export-driven economies’ currency. While speaking to the Australian Financial Review last month, Yong emphasized the possible global impacts of the virus.

Yong said in an interview, “This is a health crisis leading to a crisis of confidence, leading to consumption collapsing, demand destruction and then an economic crisis.”

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Comments (1)
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Is Dymon doing anything with those profits to invest in post-COVID market growth initiatives or help medical professionals and communities?

Economics, Finance and Investing