The performance of hedge funds has been bolstered in 2017 by the reversal of the tight market correlations of recent years. The gradual reversal of quantitative easing offers further opportunities to shine.A few years back, news that the Fed was reducing its balance sheet and considering rate rises would have prompted a severe market reaction. Today, as the ECB sets out plans for shrinking its own quantitative easing (QE) programme, the calm on financial markets is striking, affording, we believe, new opportunities for hedge funds. In hindsight, three obvious trends stand out. First, backed by significant and sustained monetary stimulus, long-only assets have risen in unison over the past 10 years. To take two examples, the S&P500 index has returned +15% a year since its nadir in Q1 2009

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