Sun, Jan 21, 2018
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. U.S. economy, inflation and alternative investments to dominate 2018 markets, says family office Wilmington Trust[more]

    Komfie Manalo, Opalesque Asia: The emergence of a late-cycle economy in the U.S., the mystery of inflation and growth from a domestic and global perspective, and the potential for alternative investments to prosper against a backdrop of rich valuations, low yields, and higher volatility are the t

  2. Performance - Some hedge funds deliver double-digit gains for 2017, Brevan Howard's hedge fund suffers biggest annual loss in 2017, Crispin Odey's flagship hedge fund plummeted about 20% in 2017, Profits fall 90% at ex-Morgan Stanley banker's hedge fund, Fannie-Freddie overhaul might mint hedge fund riches, losses[more]

    Some hedge funds deliver double-digit gains for 2017 From Reuters/Investing.com: A handful of hedge funds ended 2017 with double digit returns, their investors said, at a time the $3 trillion industry took in fresh money and posted its best returns in years, industry data show. Act

  3. Investing - Hedge funds start 2018 with record $19 billion bet on the euro, Hedge fund Kora Management invests in Satin Creditcare[more]

    Hedge funds start 2018 with record $19 billion bet on the euro From Reuters.com: Hedge funds have kicked off 2018 with their biggest bet ever on the euro rising, a clear vote of confidence in the single currency but, with positioning so stretched, one which could backfire in the near ter

  4. News Briefs - Mobius to retire from Franklin Templeton, Authorities decrypt smart phone of Princeton grad charged with killing Manhattan hedge fund dad, Investigators seize (more) antiques from hedge-fund billionaire Michael Steinhardt's collection[more]

    Mobius to retire from Franklin Templeton Emerging markets pioneer Mark Mobius will be stepping down as executive chairman of the Templeton Emerging Markets Group (TEMG) and formally retire from Franklin Templeton on 31 January. He will also be relinquishing his post as portfolio manager

  5. Comment - Seeding arrangements: Structure, approach, and the current market[more]

    From international law firm K&L Gates: Private fund growth has exploded over the last several years. While some areas are hotter than others, overall the industry has seen substantial growth. Existing managers have been able to launch larger funds and new managers have been able to successfully ente