Opalesque Industry Update: Hedge funds gained 2.93% in January, according to the Barclay Hedge Fund Index compiled by BarclayHedge.|
“The Fed’s announcement that they will keep interest rates near zero percent through 2014 helped to fuel the equity rally that began in mid-December,” says Sol Waksman, founder and president of BarclayHedge.
All but one of the 18 indices tracked by BarclayHedge had gains in January. The Barclay Equity Long Bias Index was up 4.99%, Healthcare & Biotechnology gained 4.96%, Emerging Markets were up 4.40%, the Event Driven Index added 2.79%, and European Equities gained 2.49%.
“Although investor money flowed into risk assets, bonds prices also rose with the JP Morgan World Government Bond Index gaining 61 bps,” says Waksman.
“Favorable market conditions set the stage for a strong showing with roughly 85 percent of hedge funds reporting profits in January.”
After leading all BarclayHedge indices in 2011 with an overall return of 6.57%, the Equity Short Bias Index dropped 10.48% in January.
“The Equity Short Bias Index suffered its worst January performance in 15 years, since we began tracking the returns of short sellers in 1997,” says Waksman. “The previous low for January was a 3.36 percent loss in 2006.”
The Barclay Fund of Funds Index was up 2.08% in January, its best start since a 2.85% gain in January of 2006.