Fri, Feb 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hennessee Hedge Fund Index advanced +0.28% in April (+5.09% YTD), in the bull market everyone hates

Friday, May 10, 2013
Opalesque Industry Update – Hennessee Group LLC announced today that the Hennessee Hedge Fund Index advanced +0.28% in April 2013 (+5.09% YTD), while the S&P 500 advanced +1.81% (+12.02% YTD), the Dow Jones Industrial Average increased +1.79% (+13.24% YTD), and the NASDAQ Composite Index climbed +1.88% (+10.25% YTD). Bonds also advanced, as the Barclays Aggregate Bond Index increased +1.01% (+0.89% YTD).

“Hedge funds were positive in April as long positions performed well. The markets remain in ‘risk-on’ mode,” commented Charles Gradante, Co-Founder of Hennessee Group. “Economic data remains in a 'goldilocks' zone, weak enough to justify continued stimulus but strong enough to keep expectations positive.”

"Correlations among stocks has dropped from a high of 80% in 2012 to the lowest level since 2007 at 60%. Any company specific factors are now more likely to drive stock selection than any other time in the past 6 years,” said Lee Hennessee, Managing Principal of Hennessee Group. “This should benefit hedge fund managers.”

Equity long/short underperformed in April, as the Hennessee Long/Short Equity Index declined -0.17% (+5.71% YTD). The U.S. economy grew 2.5% during the first quarter of 2013, according to the Bureau of Economic Analysis, a pace that was weaker than expected. Risk assets continue to be supported by global monetary easing. Broad equity markets continued to rally, reaching all time highs. The best performing sectors were telecommunication services (+5.99%), utilities (+5.89%), and consumer staples (+2.90%). The worst performing sectors were energy (-0.88%) and industrials (-0.84%). Managers have increased their net exposures, but remain concerned about the removal of stimulus and weaker than expected economic data.

“The unemployment report at the end of April caused a sell-off in the 5 year bond with those proceeds moving into equities setting all time highs and prompting many hedge funds to increase beta exposure, believing that the rotation out of bonds and into stocks has begun,” stated Charles Gradante.

The Hennessee Arbitrage/Event Driven Index advanced +0.87% in April (+4.5% YTD). The Barclays Aggregate Bond Index advanced +1.01% (-0.12% YTD). Yields on Treasuries were relatively flat, with the 10 Year Treasury yield declined to 1.70%. The Merrill Lynch High Yield Master II Index returned +1.86% (+4.81% YTD). High yield spreads declined to 455 basis points over treasuries. The Hennessee Distressed Index increased +1.62% in March (+5.47% YTD). Distressed portfolios benefited from position specific catalysts and the broad market rally. The Hennessee Merger Arbitrage Index advanced +1.29% in April (+3.85% YTD). Managers posted modest positive gains as M&A activity continued. The Hennessee Convertible Arbitrage Index returned -0.04% in April (+1.65% YTD). Managers were flat as equity market gains and spread tightening were offset by catalyst specific situations.

“Speculators raised their net-long position by 19 percent to 54,762 futures and options as of April 30, reported by U.S. Commodity Futures Trading Commission,” commented Charles Gradante. “Holdings of short contracts retreated 9.2 percent, the most since March 19.”

The Hennessee Global/Macro Index advanced +0.80% in March (+5.07% YTD). Global financial markets continued to rally through March, extending their gains, as developed markets outperformed emerging markets. The MSCI EAFE Index rose +4.74% (+9.33% YTD). U.S. and Japanese equities continued to outperform. International hedge fund managers were also positive, as the Hennessee International Index increased +1.37% (+7.30%). Emerging markets were up modestly, as the MSCI Emerging Market Index advanced +0.44% (-1.49% YTD). Emerging market hedge funds also struggled relative to developed market counterparts, as the Hennessee Emerging Market Index advanced +0.73% (+3.12% YTD). The Hennessee Macro Index advanced +0.06% for the month (+2.32%). Managers experienced gains long global equities and short commodities, specifically metals, which declined sharply. Long fixed income generated gains as yields declined. The Euro strengthened against the U.S. dollar, while the Yen continued to weaken.

Press release

www.hennesseegroup.com

Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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: Global Sigma captures February's long-vol trade[more]

    Bailey McCann, Opalesque New York for New Managers: Florida-based Global Sigma rode February's volatility to new highs. The firm's AGSF strategy is up +2.8 percent through February 16 and +4.2 percent YTD a

  2. Art & Motion launches collectible car alternative investment vehicle[more]

    Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu

  3. Investing - Hedge funds turn short on tech just as stock rally takes off, After biggest short, speculators slash bearish US bond bets as supply deluge looms[more]

    Hedge funds turn short on tech just as stock rally takes off From Newsmax.com: A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, ac

  4. Low volatility funds fail to protect investors[more]

    From FT.com: A number of exchange traded funds (ETFs) designed to protect investors from sharp stock market gyrations lost more money than mainstream US stocks during a sell-off this month, underperforming in precisely the conditions in which they were meant to thrive. Low volatility ETFs, lau

  5. Legal - Hedge funds fight to save M&A arbitrage strategy, Fannie Mae and Freddie Mac ruling blow to hedge funds[more]

    Hedge funds fight to save M&A arbitrage strategy From FT.com: Hedge funds which use the US courts to wring higher prices for merger and acquisition deals are fighting to save the lucrative investment strategy, after a Delaware court ruling that threatens to shut it down. Verition Partner