Opalesque Industry Updates - The Scotia Capital Canadian Hedge Fund Performance Index finished February 2010 up 1.18% on an asset weighted basis and up 1.24% on an equal weighted basis. The Index underperformed North American equities, but outperformed broader hedge fund indices both on an asset and equal weighted basis. |
Global equities were mixed in February, as North American equities outperformed European counterparts. After dipping in the initial part of the month, North American equities rallied back strongly to finish February in positive territory, gaining back nearly all of January’s losses. Key themes impacting capital markets in month included ongoing concern over Greece’s financial situation, whether it may spread to other EU members, and how the EU is navigating through the uncertainty. Further market motifs driving February performance were stabilizing economic data, stronger than expected corporate earnings results for Q4, and a slight pick-up in M&A. All ten sectors in Canada posted monthly gains, as the tech sector led the TSX’s 4.83% February rebound, with further contribution from materials and telecom. Commodities generally rallied in February: most benefitted from the stabilization of economic data and followed suit with oil’s climb.
In line with their global hedge fund peers, Canadian managers’ aggregate February gains were somewhat muted vis-à-vis North American equities markets due to ongoing overall defensive positioning. Canadian managers generally found the February trading environment to be favourable and less volatile than in January, and took advantage of trending in FX and fixed income markets. Nimble equity-focussed, trading-oriented strategies also posted overall positive results on the month. Performance chart available: Source