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

Morningstar MSCI Composite Hedge Fund Index up 0.5% (est.) in November (4.8% YTD)

Thursday, December 27, 2012
Opalesque Industry Update — Morningstar Inc., a leading provider of independent investment research, reports preliminary hedge fund performance for November 2012 as well as estimated asset flows through October.

The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, rose 0.5% in November, and was up 4.8% year to date and 5.0% over the last 12 months.

“International equities and high-yield bonds rallied in November, boosting long-short equity and long-short credit hedge fund strategies,” Nadia Papagiannis, director of alternative fund research at Morningstar, said.

The Morningstar MSCI Asia Pacific Hedge Fund Index jumped 1.2% in November, more than any other Morningstar hedge fund index. Japanese and Taiwanese equities climbed, as a call for elections in Japan brought the hope of more economic stimulus, and as Taiwan’s cabinet announced they would support measures to boost the country’s stock market. In Europe, markets rallied later in the month as European finance ministers negotiated a new debt deal to keep Greece in the Eurozone. The Morningstar MSCI Europe Hedge Fund Index rose 0.7% in November.

Good news in Europe also pushed European high-yield bond prices higher. Hedge funds profited from long credit positions in countries such as Greece, Poland, and Turkey. The Morningstar MSCI Long-Short Credit Hedge Fund Index rose 0.6% in November. U.S. equity and credit markets underperformed global markets in November.

Uncertainty over the outcome of the “fiscal cliff” caused losses in domestic stocks and bonds, and pushed Treasuries higher early in the month. Positive housing and consumer spending numbers cause those trends to reverse mid-month, however. Still, U.S.-focused long/short equity hedge funds lost money. The Morningstar MSCI North America Hedge Fund Index declined 0.3% in November.

Merger arbitrage and event-driven strategies fared particularly well in November, as the impending fiscal cliff triggered a significant number of new deals since October. The Morningstar MSCI Merger Arbitrage and the Event-Driven Hedge Fund Indexes both climbed approximately 0.7% in November.

Conversely, the news kept getting worse for systematic managed futures strategies, those that take long or short positions in futures contracts based on longer-term price trends in various asset classes. In November, the Morningstar MSCI Systematic Trading Hedge Fund Index fell 0.6%, bringing the losses to 4.3% for the year to date.

Rapid swings in the price of commodities such as gold and crude oil hurt performance in November. Short-bias hedge fund strategies did even worse than managed futures strategies, as equity and credit markets performed strongly this year. The Morningstar MSCI Short Bias All Size Hedge Fund Index fell 2.7% in November and 12.5% for the year to date.

In October, single-manager hedge funds in Morningstar's Hedge Fund Database saw outflows of almost $3 billion.

Multistrategy funds experienced the heaviest redemptions among all single-manager categories, bleeding $1.4 billion. Not all categories lost assets, however. Global macro funds, which saw the largest net outflows in September, saw the largest net inflows in October, of $602 million. For the year-to-date through October, investors have poured the most assets into Diversified Arbitrage, Multistrategy, and Global Macro hedge fund strategies, and have pulled the most from Systematic Futures. The best-performing funds (5-star funds) received strong inflows throughout the year, while all other hedge funds in the database experience outflows, on average.

November returns for the Morningstar MSCI Hedge Fund Indexes and October asset flows are based on funds that reported as of December 14, 2012. Hedge fund investors, managers, consultants, and advisors can access additional information through Morningstar Direct SM , the company’s global research platform for institutions.

Press release

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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  5. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und