Opalesque Industry Update - Global equity markets began the New Year with strong gains, with strength across Technology, Energy and Financials sectors. The US Dollar rose against the Euro as several European sovereign credit ratings were downgraded. Commodities began the year with mixed performance with gains in Metals & Oil offset by Agricultural and Natural Gas declines. |
Hedge funds posted strong gains to begin the year, with the HFRX Global Hedge Fund Index gaining +1.18%, with gains across all main hedge fund strategies. The HFRX Market Directional Index, which includes constituents employing higher levels of market exposure, posted a gain of +1.35% to begin the year.
The HFRX Event Driven Index posted a gain of +2.02% through mid-January, the second largest gain since September '10, with strongest gains concentrated in Activist and Special Situations exposures. Developments in bankruptcies including American Airlines and MF Global contributed to gains, with the HFRX Distressed Index posting a gain of +1.76%. Positive equity and credit market developments also contributed to gains with the HFRX Special Situations Index posting a gain of +1.74% for the period. The HFRX Merger Arbitrage Index gained +0.46%, as managers were positioned for developments in the NYSE/Deutsche Boerse and the AT&T/T-Mobile transactions.
The HFRX Equity Hedge Index gained +1.30% through mid-January, from positive contributions concentrated in US large cap, Financials and Energy exposures. The HFRX Fundamental Value Index gained +0.74% with contribution from European exposure, while the HFRX Fundamental Growth Index posted a gain of +0.56% with contributions from small cap and Latin American exposures. The HFRX Equity Market Neutral Index posted a gain of +0.82%, with contribution from Technology exposure.
The HFRX Relative Value Arbitrage Index posted a gain of +0.98% through mid-January, with gains across all Relative Value strategies. Yields remained low as credit tightened through mid-month, with gains across multi-strategy, corporate and convertible exposures. The HFRX Convertible Arbitrage Index and the HFRX RVA Multi-Strategy Index gained +0.99% and +0.78%, respectively.
The HFRX Macro/CTA Index gained +0.32% through mid-January, from positive contribution discretionary fixed-income exposures offset by mixed performance in commodity, currency and systematic strategies. Partially offsetting these gains, the HFRX Systematic Diversified CTA Index posted a decline of -0.32% with gains in Metals offset by weakness in Agriculturals and Natural Gas.
Comments reference performance as published through January 18, 2012.
Full performance table on Hedge Fund Research: Source