Fri, Oct 28, 2016
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.”


Press Release


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. David Einhorn speaks on passive investing, Mylan, his cheapest stock, the Fed[more]

    From Greenlight Capital hedge fund manager David Einhorn (Trades, Portfolio) joined nine other famed investors on Tuesday to talk about stocks at the annual Great Investors’ Best Ideas Investment Symposium in Dallas. Presenters at the annual conference typically pitch one or severa

  2. Investing - Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities, Lansdowne's Roden says likes animal genetics company Genus[more]

    Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities From As ValueWalk reported back in February, earlier this year Andrew Lawrence set out to raise $250 million to $500 million for a fund that will buy stakes in hedge funds that have suspended redem

  3. Opalesque Roundtable: Style drift, poor communications and credibility fatigue are biggest red flags for hedge funds investors[more]

    Komfie Manalo, Opalesque Asia: Style drift, poor communications and credibility fatigue are the biggest red flags for hedge funds investors, said participants of the latest 2016 Opalesque Investor Roundtable, sponso

  4. Barclay CTA Index down 0.40% in September (+0.10% YTD)[more]

    Managed futures traders lost 0.40% in September according to the Barclay CTA Index compiled by BarclayHedge. The Index is up 0.10% year to date. “The US Fed, in spite of its hawkish tone, opted to hold rates steady which roiled financial markets,” says Sol Waksman, founder and president of BarclayHe

  5. Opalesque Exclusive: Meet Emma, your friendly A.I. helper[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Shaunka Khire, who co-designed an artificial intelligence (AI) robot called EMMA/MANSI, talks to Opalesque