Tue, May 24, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds post strong January gains as macro risks shift

Thursday, February 07, 2013
Opalesque Industry Update: Hedge funds posted strong gains in January as the resolution of the US fiscal cliff and investor optimism regarding the European banking and sovereign debt crisis drove gains across all hedge fund strategies to begin 2013, according to data released today by HFR. The HFRI Fund Weighted Composite Index rose by +2.8 percent, the seventh gain in the last eight months and the strongest monthly gain since January 2012. Fund of Hedge Funds gained +2.5 percent, their third consecutive gain and sixth in last seven months.

Equity Hedge led all strategies as global equity markets rallied across nearly all regions, with the HFRI Equity Hedge Index gaining +3.7 percent for January. Gains were also distributed broadly across Fundamental Value, Growth and Quantitative Directional strategies, with these returning +4.5, +3.8 and +3.8 percent, respectively. Short-selling strategies were the lone sub-strategy to decline in January, losing -3.7 percent.

Fixed income-based Relative Value Arbitrage (RVA), the leading area of strategy performance in 2012, extended recent gains as the HFRI Relative Value Index gained +2.5 percent in January, the strongest monthly gain since September 2010. Significantly, RVA gains also occurred through an environment of increasing yields in most developed markets globally. Event Driven (ED) strategies also posted strong gains as activist positioning in Herbalife and other dynamic M&A situations contributed to performance, with the HFRI Event Driven Index advancing +2.2 percent, the eighth consecutive monthly gain for the Index and the strongest month since January 2012.

Currency volume soared in January in response to catalysts of inflation targeting by the Bank of Japan and falling sovereign yields across Italy, Spain and Greece driving the Euro to a 14-month high against the US dollar. The HFRI Macro Index gained +1.6 percent, only the second monthly gain in last six months and the strongest gain since April 2011, with positive contributions across Quantitative, Discretionary, Commodity, Currency and Emerging Markets exposures. The HFRI Macro Systematic Diversified/CTA Index gained +1.9 percent, improving on a disappointing decline of -2.5 percent for 2012, while the HFRI Emerging Markets Index gained +3.4 percent, improving on last year’s gain of +10.3 percent.

“Hedge fund performance in January reflects an important shift in the driver of financial market performance from the macro and political uncertainty which dominated 2012 to fundamentally driven, mean-reverting factors including growth, earnings and relative valuation,” stated Kenneth J. Heinz, President of HFR. “Macro risks have been reduced, but not eliminated, creating a compelling environment for hedge fund performance as investors remain sensitive to these risks, but are also increasing opportunistic with regard to positioning and performance generation. This shift toward fundamentals and increasing risk tolerance is likely to provide a powerful catalyst to hedge fund performance in 2013.”

HFR

Press Release

BM

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. Other voices: What current trends tell us about the future of the hedge fund industry[more]

    By: Don Steinbrugge, Agecroft Partners The following comments are excerpted from Agecroft Partners’ Don Steinbrugge’s presentation delivered at the 69th CFA Institute Annual Conference held on May 9th, 2016 in Montreal. In Mr. Steinbrugge’s session titled "What Current Trends Tell Us about th

  2. Investing - Steve Cohen boosted Sotheby’s stake to $86 million last quarter, Larry Robbins' hedge fund sells off all CHS, UHS hospital stocks, Tiger Global cut stakes in Amazon, JD.com, Apple last quarter, Invest in real estate near biotech hubs, Prudential’s Hyat says, Valeant: A hedge fund hotel wrecking ball[more]

    Steve Cohen boosted Sotheby’s stake to $86 million last quarter Billionaire trader and art collector Steve Cohen is on a buying spree of Sotheby’s shares. Cohen’s Point72 Asset Management acquired 1.2 million Sotheby’s shares, bringing its total to 3.2 million valued at $86.1 million at

  3. Legal - Boaz Weinstein wins round in fight with Canada’s PSP[more]

    From FT.com: Boaz Weinstein, the hedge fund manager credited with spotting JPMorgan’s “London Whale” in 2012, has won a round in a legal battle with Canada’s Public Sector Pension Investment Board that had become a test case of responsibilities when clients withdraw money. PSP sued Mr Weinstein and

  4. Regulatory - The latest Fannie and Freddie reform bill offers a bonanza for hedge funds[more]

    From WSJ.com: The latest housing finance reform bill making the rounds on Capitol Hill offers a bonanza for hedge funds seeking to cash in on their investments in Fannie Mae Mae and Freddie Mac—but the cost to taxpayers would be steep. Congressman Mick Mulvaney, the South Carolina Republican, introd

  5. West Virginia objects to Alpha Natural sale to hedge fund[more]

    From AP/Heraldcourier.com: West Virginia's environmental authority has filed an objection to the proposed $500 million sale of Alpha Natural Resources' assets to a hedge fund, arguing that the deal could leave the state holding hundreds of millions in reclamation liabilities. The Register-Hera