Sun, Apr 20, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar reports returns of 1.9% for hedge funds over January

Monday, March 04, 2013
Opalesque Industry Update - Morningstar Inc, a provider of independent investment research, reported preliminary hedge fund performance for January 2013 as well as estimated asset flows through December. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, rose 1.9% in January and advanced 6.3% for the trailing 12 months. Almost all Morningstar MSCI hedge fund indexes rose in January, and the trailing 12 months showed declines in only the Short Bias and Systematic Trading categories.

Reduced global economic and political uncertainty during January fueled a broad increase in appetite for risky assets,” Philip Guziec, alternative investing strategist at Morningstar , said. “Excluding the Short Biased category, all hedge fund strategies were up for the month, and the most risk-sensitive strategies posted the strongest performance.” January started with a two-day rally in equity markets that accounted for most of the 5.2% rise in the S&P 500 Index for the month.

The Morningstar MSCI North America Hedge Fund Index, which primarily includes long - short equity hedge funds, ended the month up 2.3%. Small - cap strategies faired even better. The Russell 2000 Index jumped 6.3%, while the Morningstar MSCI Small Cap Hedge Fund Index rose 3.9%. The Morningstar MSCI Emerging Markets Hedge Fund Index also rose substantially, up 3.0% in January , driven by positive economic news from China about GDP and exports. These positive signals also supported the performance of the Morningstar MSCI Asia Pacific Hedge Fund Index and MSCI AC Asia Index, which climbed 4.9% and 2.5% , respectively. Short sellers were caught short by the broad - based rally , however, pushing the Morningstar MSCI Short Bias Hedge Fund Index down 5.2%.

Widespread investor optimism also sent less risky fixed - income strategies , such as those involving Treasuries and investment - grade corporate bond s , down during January, but high - yield and relative - value hedge fund strategies posted gains .

The Morningstar MSCI Long - Short Credit and Fixed Income Arbitrage Hedge Fund Indexes increased 0.7 and 0.9%, respectively, in January.

The month - long equity rally as well as rising prices across the energy, agricultural, and metal commodity futures markets also supported price - trend following managed futures strategies in January , leading to a 2.8% rise in the Morningstar MSCI Systematic Trading Hedge Fund Index .

January’s uptick was not enough to offset previous losses, however , and the Systematic Trading Hedge Fund Index was down 1.2% over the past 12 months. In December 2012, single - manager funds in Morningstar’s Hedge Fund Database saw outflows of $4.7 billion, marking the fourth consecutive month of outflows, and representing more than half of the $7.0 billion that investors pulled from hedge funds in the database during 2012. This was a sharp reversal from investor behavior seen during 2011 and 2010, when funds in the Morningstar Hedge Fund Database received inflows of $17.9 and $10.1 billion, respectively. The largest redemptions came from multistrategy hedge funds, which gave up $1.7 billion , or 35% of the redemptions in the Morningstar database for the month.

Over the calendar year 2012, however, multistrategy funds in the database gathered more assets than any other category of $4.2 billion. Hedge funds in the Systematic Futures category, which trade futures contracts according to trend - following and momentum - based strategies, also suffered in December, losing $826 million, followed by U.S. long / short equity hedge funds, which lost $ 500 million. Only the Distressed Securities , Emerging Market Long - Only Equity , and Debt Arbitrage hedge fund categories posted inflows of $46 million, $25 million, and $2 million, respectively, in December.

Press release

bc

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  4. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an

  5. SEC allows investment funds to use social media[more]

    Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has released new guidance letting investment funds and advisors use social media to promote client reviews. The guidance seeks to assist investment managers in developing compliance policies and procedures reasonably