Opalesque Industry Update - Global financial markets posted gains for February, despite increasing geopolitical tensions arising from secular unrest in Ukraine. Global equity markets posted broad-based gains recovering prior month declines, led by US Technology, Cyclical, Healthcare and Commodity-sensitive exposures. |
European and Asian equities also posted gains, with European gains led by France, Italy, Sweden and the UK, while Asian gains were led by Hong Kong, the Philippines, Australia and Thailand. Despite these, Emerging Market equities across Latin America were mixed, China and the Middle East posted gains while Russian equities posted declines.
US and developed European yields were little changed against the prior month end, with bond yields measuring small declines in Italy and Spain. The US Dollar declined against most currencies, reversing much of the prior month's gains, falling sharply against the British Pound Sterling and Euro; the US Dollar also fell sharply against Emerging Market and Commodity currencies, with the largest monthly declines posted against the Indonesian rupiah, New Zealand Dollar, South African Rand and Brazilian Real. The US dollar posted a late month gain against the Chinese RMB, while the virtual currency Bitcoin fell sharply in value for the month.
Commodities across Energy, Metals and Agriculturals continued to post strong gains, led by sharp gains in Gold, Oil, Silver, Platinum, Hogs, Coffee and Soybeans. Merger activity remained robust, led by Facebook's $19 billion acquisition of WhatsApp. UCITS compliant Hedge funds posted gains with contributions across all strategies, with the HFRU Hedge Fund Composite Index gaining +1.20% in February, the strongest gain since October 2013.
HFRU Equity Hedge Index posted a gain of +1.63% in February, the strongest gain since October 2013, with positive contributions from both Fundamental and Market Neutral strategies complemented by regional exposures to European equities. Exposure to recovering Emerging Markets also has a favorable contribution to HFRU EH in February.
HFRU Event Driven Index posted a gain of +1.21% in February, the strongest gain since December 2012, with contributions from European Equity Special Situations and Emerging Markets Fixed Income strategies. Global Merger Arbitrage and Distressed exposures also has positive contribution to HFRU ED performance.
HFRU Macro Index posted a gain of +1.19% in February, the strongest gain since July 2012 with positive contributions from commodity exposures including Metals, Energy and Agricultural, which were complemented by equity and fixed income exposure in Discretionary Macro strategies.
HFRU Relative Value Arbitrage Index posted a gain of +0.59% in February, with positive contributions from exposure to Real Estate, Emerging Markets Fixed Income and Global Convertible strategies, which were only partially offset by declines in Volatility exposure.