Sun, Aug 2, 2015
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: Despite bumpy June/July, CTAs hold on[more]

    Bailey McCann, Opalesque New York: To say that things have been rocky in managed futures recently is putting it mildly. In June, the industry saw its worst month on a performance basis in the past four years. Then yesterday,

  2. Investing - Hedge fund billionaires bet on London as revival gathers pace[more]

    From Bloomberg.com: London’s fund industry is bouncing back, and U.S. billionaires Steven A. Cohen and Ken Griffin are grabbing a piece of the action. Griffin’s Citadel and Millennium Management, a hedge fund run by Israel Englander, have bulked up in London, where asset growth is outpacing the U.S.

  3. Other Voices: Same day reporting and the evolving role of fund administrators[more]

    By: Scott Price, Head of Business Development and Client Management for North America, Maitland Ernst & Young’s latest glob

  4. Cowen Group, Inc. to acquire Conifer Securities[more]

    Cowen Group, Inc. and Conifer Securities, LLC had announced the signing of a definitive agreement under which Cowen will acquire Conifer Securities, the prime services division of Conifer Financial Services LLC. The transaction, the terms of which have not yet been disclosed, was approved by the boa

  5. Cargill’s Black River Asset to shut down four hedge funds[more]

    Komfie Manalo, Opalesque Asia: Cargill Inc.’s $7.4 billion Black River Asset Management said it was closing four hedge funds with a combined $ 1 billion in assets and start returning investors money over the next several months, various media said. The hedge funds represent 15% of Black River’

 

banner