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Alternative Market Briefing

Hedge funds rise to near record level as post-election rally lifts industry in November

Thursday, December 08, 2016

Komfie Manalo, Opalesque Asia:

Hedge funds rose in November, as the surprising victory of Donald Trump in the U.S. Presidential election drove expectations for renewed growth, infrastructure spending and reduced regulation. The HFRI Fund Weighted Composite Index (FWC) Index gained +0.9% in the month (+4.57 YTD), with the Index Value rising to 12,841.95, the highest level since May 2015 and 2nd highest since inception (1990), as reported by Hedge Fund Research.

"Hedge funds advanced to a near record level in November on the surprise Trump victory despite the sharp rise in yields and U.S. Dollar strength, as U.S. equities also rallied to record highs on expectations of a new administration focused on economic growth and reduced regulation," stated Kenneth J. Heinz, President of HFR.

The November advance reverses the decline from the prior month, represents the eighth monthly gain in the past nine months, and brings YTD performance to +4.6%, topping global equities. The HFRI Asset Weighted Index posted a larger gain of +1.2%in November, the fifth consecutive monthly advance and also the eighth monthly gain in the past nine months.

Heinz added, "While few funds may have predicted the election result, it was a true inflection point with hedge fund performance benefitting from post-election fundamental mean-reversion and convergence predicated on gradually normalizing risk-free ra......................

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