Wed, Sep 20, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds lose -0.18% in January

Tuesday, February 18, 2014
Opalesque Industry Update - Hennessee Group LLC announced today that the Hennessee Hedge Fund Index decreased -0.18% in January (-0.18% YTD), while the S&P 500 dropped -3.56% (-3.56% YTD), the Dow Jones Industrial Average fell -5.30% (-5.30% YTD), and the NASDAQ Composite Index dipped -1.74% (-1.74% YTD). Bonds were positive on the month, as the Barclays Aggregate Bond Index gained +1.48% (+1.48% YTD).

"While both the long/short equity index and arbitrage/event driven index successfully avoided the -3.56% decline in the equity markets (+0.83% and +0.58%, respectively), the global/macro index was down -2.27% resulting in the overall decline in the Hennessee Hedge Fund Index of -0.18%.” commented Charles Gradante, Co-Founder of Hennessee Group LLC. "Chairwoman Janet Yellen is on a rocket ship with no windows as tapering in the U.S. led to widening credit spreads and rising interest rates in emerging markets which spooked global equity markets causing a flight to safety as emerging markets and their currencies became less attractive.”

Equity long/short hedge funds were positive in January, as the Hennessee Long/Short Equity Index gained +0.83% (+0.83% YTD). The best performing sectors were utilities (+2.88%), health care (+0.87%), and information technology (-2.59%), while underperforming sectors were energy (-6.33%), consumer discretionary (-5.97%) and consumer staples (-5.30%). Risk assets reversed course in January as volatility, measured by the VIX, rose to levels not seen since October 2013 when the U.S. Federal government briefly shut down. Equity markets in particular suffered a weak start to 2014 across the board, however, hedge funds managed to weather the volatility quite well.

“One manager agreed with Larry Kudlow of CNBC stating that, ‘Larry Kudlow has it right, this bull market is intact. There is no competition for equities. Bull markets don’t die of old age. Bull markets end with a recession, excessive valuations or a fat tail event.” reported Charles Gradante.

The Hennessee Arbitrage/Event Driven Index rose +0.58% in January (+0.58% YTD). The Barclays Aggregate Bond Index gained +1.48% (+1.48% YTD) as interest rates dropped in January. High yield increased as the Merrill Lynch High Yield Master II Index increased +0.74% in January (+0.74% YTD). High yield spreads increased rather modestly, rising 21 basis points to end the month 421 basis points over treasuries. The Hennessee Distressed Index climbed +1.01% in January (+1.01% YTD) due to strong performance from restructurings in the consumer, communications and basic materials sectors and on the heels of a relatively strong 2013. The Hennessee Merger Arbitrage Index gained +0.55% in January (+0.55% YTD) as there were several favorable deals including Suntory’s announced $16 billion acquisition of Beam Inc. The Hennessee Convertible Arbitrage Index jumped +2.54% in January (+2.54% YTD).

The Hennessee Global/Macro Index lost -2.27% in January (-2.27% YTD). The Dow Jones UBS Commodity Index reversed course and gained +1.23% (-9.58% YTD), while the MSCI ACWI Index lost -4.07% (-4.07% YTD) and the MSCI EAFE Index dropped -4.07% (-4.07% YTD). The Hennessee International Index fell -3.69% (-3.69%). Gains in Denmark, Ireland, Israel and New Zealand were offset by weakness in Finland, Norway, Belgium and Canada. Emerging markets were mostly negative for December, as the MSCI Emerging Market Index sunk -6.60% (-6.60% YTD), while, the Hennessee Emerging Market Index slipped -1.48% (-1.48% YTD). Emerging markets continued to underperform developed markets as investors continue to see considerable growth and inflation risks in these markets. While hedge funds have significantly the long-only benchmarks, many investors continue to favor developed markets over emerging markets. The Hennessee Macro Index decreased -1.77% for the month of January (-1.77% YTD).

Fixed income managers were modestly positive in January as bond yields dropped for the month with the 10-Year U.S. Treasury ending the month at 2.67%, down from 3.04% in December. Commodities were mixed for the month, with gold rising +3.57% and silver dropping -1.44% for the month. The U.S. Dollar gained against major currencies, rising +1.14% versus the Euro, +1.38% versus the Australian Dollar, +4.52% versus the Canadian Dollar while losing -2.64% versus the Japanese Yen. Crude oil fell for the month with WTI dropping -0.94% while natural gas jumped +16.86% for the month.

Hennessee Group

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. Institutions - Canada's pension funds lever up[more]

    From Institutionalinvestor.com: Canadian pension plans are among the most admired institutional investors for their prowess as money managers. Now pension plans in Canada are upping the ante, increasingly issuing long-term bonds and using the borrowed money, or leverage, to try a

  2. Manager Profile - The three quants in their 20s running a hedge fund making $1 billion of trades daily[more]

    From Forbes.com: In an office overlooking downtown Boston, the views are partially obscured by math formulas and technical drawings that have been scribbled on the windows. Wearing a T-shirt with the words "machine earning" printed on it, Luca Lin says the formulas are being developed to help trade

  3. News Briefs - Iron Cove Partners launches hedge fund manuscript management & professional liability insurance policy, Private equity, hedge funds eye bizav financing market. Blue Capital halts ILS fund buy-backs as hurricane Irma approaches[more]

    Iron Cove Partners launches hedge fund manuscript management & professional liability insurance policy Iron Cove Partners, a national insurance brokerage specializing in the needs of the alternative asset management community, today announced the launch of its newest insurance product, th

  4. Asia - Hedge funds used to love shorting China. Now, not so much, Fledgling China FoFs require careful use: NCSSF, Amac, Japanese banks turn to PE, hedge funds for returns[more]

    Hedge funds used to love shorting China. Now, not so much From Bloomberg.com: A sharp devaluation. A credit crisis. And an economic hard landing. That's what some of the biggest names in the hedge fund industry were predicting for China after the nation's stocks and currency tumbled in 2

  5. Launches - Orchard launches new credit platform, ETN based on hedge fund to launch on the LSE[more]

    Orchard launches new credit platform Orchard Platform has rolled out Deals as a part of its new platform launch. With the addition of Deals to their suite of technology solutions for loan originators and institutional investors, Orchard Platform takes the next step in their evolution. De