Mon, Jun 27, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hennessee Hedge Fund Index up 1.37% (+9.90% YTD), hedge funds gain in strong market as US reaches debt deal

Monday, November 11, 2013
Opalesque Industry Update - Hennessee Group LLC announced today that the Hennessee Hedge Fund Index increased +1.37% in October (+9.90% YTD), while the S&P 500 gained +4.46% (+23.16% YTD), the Dow Jones Industrial Average increased +2.75% (+18.63% YTD), and the NASDAQ Composite Index jumped +3.93% (+29.81% YTD). Bonds were also positive on the month, as the Barclays Aggregate Bond Index gained +0.81% (-1.09% YTD).

"Equity markets had their third best month of the year in October on the heels of the debt ceiling increase; not earnings, not the GDP nor employment.” commented Charles Gradante, Co-Founder of Hennessee Group LLC.

"Hedge funds underperformed once again making it 8 out of the last 10 months. The only months hedge funds beat the market was in the only two down months for 2013; June (-1.50%) and August (-3.13%). One long-short equity manager summed it up by stating: ‘Just because stocks are the only asset class in town doesn't mean I should abandon my shorts and go 100% long equities. That's not what a hedge fund does. We rely on "rational" markets where stock fundamentals are the drivers. The market in total and stocks I'm short specifically continue to rise on bad news, poor year-over-year comparables and lower earnings guidance. It's painful but I will stay hedged and wait this maniacal complacency out. By the way, Google was profitable when it came public. Twitter is not and at a market cap of $25 Billion it would place in the top 200 companies of the SP 500. The market is making big bets on many stocks whose future is not that clear to me. Especially when the Fed begins to taper. The tide will move out and we will see whose wearing swim trunks.’”

Equity long/short hedge funds were positive in October, as the Hennessee Long/Short Equity Index gained +1.29% (+15.07% YTD). The best performing sectors were telecommunication services (+7.35%), consumer staples (+6.13%), and industrials (+5.05%). The underperforming sectors were financials (+3.15%), utilities (+3.66%) and energy (+4.07%). The market continued the strong rally from September, aided by the last minute US debt deal, continued speculation the Fed would maintain its bond-buying program and stronger Chinese macroeconomic data. The Fed also announced Janet Yellen will replace Ben Bernanke as Fed Chairman, giving hope to an employment recovery, where the unemployment rate now stands at 7.2%, the lowest level for nearly five years.

“In terms of sub-strategies, Healthcare and Biotech long-short equity managers are up (+26.82%) through October followed by Value managers (+17.73%) and Financial Equity managers (+15.86%).” commented Lee Hennessee, Co-Founder of Hennessee Group LLC. “The poorest performing sub-strategies through October were short biased (-25.02%), Macro (-2.42%) and Latin America (+1.20%)”

The Hennessee Arbitrage/Event Driven Index rose +1.10% in October 2013 (+8.14% YTD). The Barclays Aggregate Bond Index gained +0.81% (-1.09% YTD) as interest rates continued to decline in October, aided by the debt deal and the Fed’s decision to continue its monthly bond purchases. High yield also increased as the Merrill Lynch High Yield Master II Index jumped +2.46% (+6.34% YTD). High yield spreads decreased rather dramatically, losing 47 basis points to end the month 436 basis points over treasuries as investor’s appetite for risk continued to increase. The Hennessee Distressed Index climbed +1.34% in October (+12.23% YTD). Distressed portfolios were also helped by a strong market. The Hennessee Merger Arbitrage Index gained +0.41% in October (+6.28% YTD). Managers continued to post gains as deal spreads tightened and markets rallied. The Hennessee Convertible Arbitrage Index rose +0.98% in October (+6.95% YTD).p> “Global/Macro Index was up for the month and the year (+1.68% and +4.12%, respectively) with Macro managers a drag on the index, up for the month (+0.34%) and down for the year (-2.42%) mostly due to losses in currency and commodity futures that overwhelmed gains in global equities” added Charles Gradante.

The Hennessee Global/Macro Index gained +1.68% in October (+4.12% YTD). Macro managers experienced gains as positive economic news came out of China, with the country’s third quarter GDP growth rate up 7.8% year-over-year. Despite this positive news, the country was the worst performing Asian market as interbank interest rates rose, raising concern about possible tighter future monetary policy. The MSCI EAFE Index jumped +3.31% (+16.81% YTD). The Hennessee International Index gained +0.86% (+5.55%). Emerging markets also posted strong returns, as the MSCI Emerging Market Index gained +4.76% (-3.70% YTD), while, the Hennessee Emerging Market Index gained +2.11% (+5.09% YTD). The Hennessee Macro Index increased +0.34% for the month of September (-2.42% YTD). The Czech Republic, Egypt, Indonesia, India and Peru saw relative outperformance while Russia, Colombia, Mexico and Chile all slightly underperformed.

Fixed income managers gained in October as bond yields decreased for the month with the 10-Year U.S. Treasury ending the month at 2.55%, down from 2.61% in September. Commodities posted mixed results for the month, with gold losing -0.45% for the month of October, while silver and platinum rose, gaining +0.99% and +3.23% for the month, respectively. The U.S. Dollar what relatively flat against major currencies, ending October down -0.03%. The Euro returned +0.42% for the month, while the Japanese Yen increased a modest +0.09%. Crude oil continued its slide, losing -5.81% for the month while natural gas gained +0.59% for the month.

Press release

Hennessee Group LLC 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 Roundup: Hedge funds shrink as liquidations outpace new launches in Q1: hedge fund news, week 27[more]

    In the week ending 17 May, 2016, HFR said hedge fund liquidations declined narrowly to begin 2016 after rising sharply to conclude 2015, as investors positioned f

  2. Europe - Hedge funds keep powder dry over big Brexit bets, Hedge funds sense profit in Europe shock waves after Brexit vote, Soros warns Brexit may cause pound plunge worse than Black Wednesday, After Brexit: What will happen if Britain votes to leave the UK?[more]

    Hedge funds keep powder dry over big Brexit bets From FT.com: Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country’s membership of the Europea

  3. News Briefs - ’Flash Boys’ get green light to launch stock exchange, Pimco says ‘storm is brewing’ in U.S. commercial real estate, Bankers get ready to rumble at Hedge Fund Fight Night, AIMA Australia celebrates 15th anniversary[more]

    ’Flash Boys’ get green light to launch stock exchange In an investing environment ruled by fast, the newest U.S. public stock exchange is banking on slow. Well, slower. IEX Group, which won Securities and Exchange Commission approval on Friday to go head-to-head with the New York Stock E

  4. Blackstone buys minority stake in New York-based credit hedge fund Marathon[more]

    Benedicte Gravrand, Opalesque Geneva: Blackstone Strategic Capital Holdings Fund, a vehicle managed by Blackstone Alternative Asset Management (BAAM), has acquired a passive, minority interest in Marathon Asset Management, for an undisclosed sum. Based in New York,

  5. Global markets fell, hedge funds gain in mid-June on Brexit, Fed rate concerns[more]

    Komfie Manalo, Opalesque Asia: Global financial markets declined through mid-June, as uncertainty associated with the upcoming Brexit referendum and expected U.S. Fed interest rate hike contributed to increases in volatility across asset classes, data provider