Finance

Hedge funds performed better under Democratic presidents than Republican ones, history shows

Published

7 months ago

November 12, 2024

Business Finance News

Traders work on the floor of the New York Stock Exchange.

NYSE

There’s been a rush of enthusiasm on Wall Street regarding Donald Trump’s election win, but hedge funds actually generate more alpha when the White House is occupied by a Democrat president than a Republican one, according to HFR, collating data going back to 1991.

When compared with the S&P 500, the industry underperformed regardless of who was president. But during Democratic administrations, the gap was about 183 basis points, with hedge funds delivering average, annualized returns of 10.16%, compared to 11.99% from the S&P 500. The underperformance gap during Republican administrations was 331 basis points. (1 basis point equals 0.01%.)

When compared with the a bond index, HFR found that hedge funds under both parties outperformed – with stronger alpha when a Democrat was in the White House.

The total net asset flows were higher under Republican administrations (about $450 billion) than Democratic ones (about $400 billion), even though since 1991, Democrats served six more years in the highest office than Republicans.

Surprisingly, the way that hedge fund participants donate in elections was a bit more tilted toward one party. According to a recent report by Open Secrets, in the 2024 election cycle, individuals in the industry donated $31 million to Democratic candidates, while almost half that amount — $16 million — went to Republican candidates.

Of course the takeaway here is that hedge fund returns are far more correlated with positioning relative to various asset-class performances than particular policies by the administration. So, it’s hard to make any predictions about what the next four years entails for the industry.

At Wednesday’s 14^th annual Delivering Alpha event, we should get a sense as to how money managers may be reconfiguring their portfolios.

Finance

Stocks making the biggest moves midday: WBD, MODG, SATS, AAPL

Published

15 hours ago

June 9, 2025

Business Finance News

Finance

Walmart taps own fintech firm for credit cards after Capital One exit

Published

16 hours ago

June 9, 2025

Business Finance News

A Capital One Walmart credit card sign is seen at a store in Mountain View, California, United States on Tuesday, November 19, 2019.

Yichuan Cao | Nurphoto | Getty Images

Walmart‘s majority-owned fintech startup OnePay said Monday it was launching a pair of new credit cards for customers of the world’s biggest retailer.

OnePay is partnering with Synchrony, a major behind-the-scenes player in retail cards, which will issue the cards and handle underwriting decisions starting in the fall, the companies said.

OnePay, which was created by Walmart in 2021 with venture firm Ribbit Capital, will handle the customer experience for the card program through its mobile app.

Walmart had leaned on Capital One as the exclusive provider of its credit cards since 2018, but sued the bank in 2023 so that it could exit the relationship years ahead of schedule. At the time, Capital One accused Walmart of seeking to end its partnership so that it could move transactions to OnePay.

The Walmart card program had 10 million customers and roughly $8.5 billion in loans outstanding last year, when the partnership with Capital One ended, according to Fitch Ratings.

For Walmart and its fintech firm, the arrangement shows that, in seeking to quickly scale up in financial services, OnePay is opting to partner with established players rather than going it alone.

In March, OnePay announced that it was tapping Swedish fintech firm Klarna to handle buy now, pay later loans at the retailer, even after testing its own installment loan program.

One-stop shop

In its quest to become a one-stop shop for Americans underserved by traditional banks, OnePay has methodically built out its offerings, which now include debit cards, high-yield savings accounts and a digital wallet with peer-to-peer payments.

OnePay is rolling out two options: a general-purpose credit card that can be used anywhere Mastercard is accepted and a store card that will only allow Walmart purchases.

Customers whose credit profiles don’t allow them to qualify for the general-purpose card will be offered the store card, according to a person with knowledge of the program.

OnePay didn’t yet disclose the rewards expected with the cards, though the general-purpose card is expected to provide a stronger value, said this person, who declined to be identified speaking ahead of the product’s release. The Synchrony partnership was reported earlier by Bloomberg.

“Our goal with this credit card program is to deliver an experience for consumers that’s transparent, rewarding, and easy to use,” OnePay CEO Omer Ismail said in the Monday release.

“We’re excited to be partnering with Synchrony to launch a program at Walmart that checks each of those boxes and will help serve millions of people,” Ismail said.