Opalesque Industry Update - Global equity markets posted gains to begin 2013 as investors responded to near term settlement of many of the issues surrounding the US fiscal cliff on the final trading day of 2012. Equity gains were broad based across regions, with leadership from the US, UK, Italy, Spain, Switzerland and Argentina, while Energy & Oil Service, Technology & Biotechnology led gains across sectors. US treasury yields rose across all maturities as the 30 year yield rose above 3 percent; Germany, France & UK also saw rising yields, although yields declined across Spain, Japan & Italy. The US dollar gained against the Japanese Yen, Euro & Swiss Franc, while falling against the Euro. Energy & Metals commodities rose led by Oil & Platinum, while gains in Agricultural commodities were led by Coffee, Corn & Cocoa.|
The HFRX Global Hedge Fund Index gained +1.45% through mid-January 2013, with positive contributions across all main strategies led by Event Driven. The HFRX Market Directional Index gained +2.20% through the same period.
Continuing its gains from the prior months, the HFRX Event Driven Index posted a gain of +2.20% through mid-Jan. The HFRX ED: Special Situations Index gained +2.64% with robust activity across the Media, Technology and Technology sectors; Special Situations strategies were active in a dynamic situation surrounding Herbalife. The HFRX Merger Arbitrage Index gained +0.39%, as M&A deals continued with announcements of the Dish Network/Clearwire, Avis/Zipcar deals, while European regulators blocked the UPS acquisition of TNT Express. Continued tightening in high yield credit also contributed to gains with the HFRX ED: Distressed Index gaining +0.65%, while Activist strategies also contributed to gains.
The HFRX Equity Hedge Index gained +1.82% through mid-Jan as equity markets gained across most geographies and sectors upon the agreements around the US fiscal cliff. The HFRX Fundamental Value Index and the HFRX Fundamental Growth Index posted a gains of +2.21% and +1.59%, respectively. Factor-based market neutral models declined while fundamental-based managers posted mixed performance, with the HFR Market Neutral Index returning -0.27% for the period.
Also continuing its gains from the past months, the HFRX Relative Value Index gained +1.55% through mid-Jan, with gains across Convertible, Corporate credit and Multi-Strategy FI Arbitrage. The HFRX RV: Multi-Strategy Index gained +1.51%, with positive contributions from US Multi-strategy and Asian credit exposures, partially offset by Commodity spread trading strategies. The HFRX RV: Convertible Arbitrage Index gained +0.82 % with strong contribution from Emerging Markets and US FI exposure, while the HFRX Fixed Income - Credit Index gained +1.16%. Yield alternative strategies posted strong performance with the HFRX MLP Index gaining +4.57% for the period.
The HFRX Macro Index posted a modest gain of +0.03% through mid-Jan, with positive contributions from Currency and Fixed Income Discretionary managers, offset by declines in Systematic CTA strategies, with the HFRX Macro: Systematic Diversified Index declining -0.33% for the period. The HFRX Emerging Markets Index posted a gain of +0.38% from contributions from Asia and Emerging Europe.