Sun, May 24, 2015
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. Comment - Top hedge fund managers talk about how easy their jobs have gotten, BlackRock to Schroders warn of Argentina’s $20bn bond glut, The 35-year “investment supercycle” is drawing to a close, says Bill Gross, Gundlach: When the Fed starts hiking rates, 'GET OUT' of this asset class[more]

    Top hedge fund managers talk about how easy their jobs have gotten From Businessinsider.com.au: Time was, before the financial crisis hit, corporate boards treated multi-billion dollar hedge fund managers like Jehovah’s Witnesses pounding on their doors and flashing bibles. But no more.

  2. T Rowe's challenge to Dell deal may fuel critics of 'appraisal'[more]

    From Reuters.com: An increasingly popular tactic used by hedge funds and others to extract more money from buyouts could soon face a major courtroom test when a big investor in Dell Inc may argue that it should be paid a higher price for the 2013 acquisition of the PC maker. The strategy, known as "

  3. News Briefs - Ergen says LightSquared plan unfairly favors hedge funds, Why hedge fund managers make good advisory clients, I learned a lot about dad-bros after spending 4 days in Vegas with 2,000 hedge funders[more]

    Ergen says LightSquared plan unfairly favors hedge funds LightSquared Inc.’s bankruptcy plan gives hedge funds that invested in the broadband company a leg up while blocking telecommunications firms from competing with it, a fund owned by Dish Network Corp. Chairman Charles Ergen said in

  4. Opalesque Exclusive: SEC approves proposed changes to Form ADV, '40 Act - comment period to follow[more]

    Bailey McCann, Opalesque New York: Hedge funds and providers of liquid alternatives will want to pay close attention to proposed reforms approved by the SEC yesterday. The changes will require more frequent reporting, as well as a closer look into social media, liquid alternative strategies, and

  5. Opalesque Exclusive: Ovation Partners targets opportunities where few "natural lenders" participate[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Changes in financial regulations post-2008 (Dodd-Frank and Basel III) are forcing banks to significantly alter their core lending businesses. And as mid-sized

 

banner