Wed, Jul 15, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds see second consecutive month of gains, up 1.59% (est.) in February, 2.41% YTD

Wednesday, March 11, 2015
Opalesque Industry Update - Hedge funds extended their gains in the second month of 2015, with the Eurekahedge Hedge Fund Index up 1.59% in February, trailing the MSCI World Index which ended the month with a strong finish, gaining 5.47%. All regional and strategic mandates ended the month in positive territory with managers focused on developed markets posting the strongest returns.

Key takeaways for the month of February 2015:

· Investor allocation activity saw an uptick in February as hedge funds recorded inflows of US$6.8 billion during the month.
· Distressed debt funds delivered the best performance among all strategic mandates, up 3.03% in February as their bets on distressed oil and gas producers paid off.
· India focused managers were down 0.51% during the month - their first month of negative returns after a 12 month winning streak.
· On a year-to-date basis, CTA/managed futures strategies lead the strategy return map with gains of 3.98%, and have recorded net asset inflows of US$4 billion. This comes after investors redeemed US$16 billion from the strategy in 2014 alone.
· Eastern Europe and Russia mandated hedge funds were the top performers during the month with gains of 12.49%, snapping a seven month losing streak.


Regional Indices

Global equity markets rose in unison during February with a return of investor risk appetite as the market downplayed fears of contagion from a possible ‘Grexit’, which was further supported by accommodative monetary policies from central banks around the world. Even as the Federal Reserve comes under increasing pressure to raise interest rates with a strengthening US economy, it appears content to adopt a ‘wait and see’ approach of preferring to raise rates too late rather than too early, which helped to send US equity markets into record territory once again. Meanwhile optimism over the European Central Bank’s massive quantitative easing with its asset purchase program of 60 billion Euros a month fuelled a further rally in European equities and bonds. Most German (and some European members) sovereign bond yields are now in negative territory, which could have implications for the pension liabilities which rely on positive rates to meet their obligations.

During the month of February, Eastern Europe and Russia hedge funds saw their first gain in eight months, with the Eurekahedge Eastern Europe & Russia Hedge Fund Index soaring 12.49%, though falling behind the Russian RTS stock index which rocketed 21.60%. The heavily oil-dependent Russian stock index and the rouble, which were previously in a freefall, reversed sharply upwards during the month as the Russian-Ukraine situation showed signs of improvement while oil prices appear to have bottomed out.

European managers came in second place, gaining 2.39% in February and 3.56% year-to-date, which outstripped returns for the entire year of 2014, buoyed by strong underlying markets as the MSCI Europe Index gained 6.09% during the month. Emerging market and Latin American managers were also up 1.98% and 1.59% respectively, benefitting from the strong gains in commodities and risk assets as a whole – the MSCI Latin America Index gained 7.10%. Similarly, mangers investing with a Japan mandate realised gains of 1.27% in February, underperforming the benchmark Nikkei 225 which rose 6.38% on further yen weakness and news that a big Japanese pension fund manager would increase its domestic equity allocation.

Strategy Indices

Volatility faded away amid increasing investor confidence as stock markets continued their upwards march in February, with the CBOE VIX Index falling from 20.97 to 13.34 as equities closed the month on multi-year highs. Distressed debt and event driven fund managers rose back into prominence after being at the bottom of the table in January, posting the largest returns out of all strategic mandates at 3.03% and 2.73% respectively, attributing gains to their long positions in the high yield bonds sector as the BofA Merrill Lynch High Yield Index gained 2.33%. Managers had jumped on the opportunity to invest in the debt of distressed oil and gas producers following the precipitous drop in oil prices and the modest recovery in oil during the month had significantly changed the outlook of these companies for the better. Long/short equity funds also performed well, reporting gains of 2.47% as stock markets around the world responded well to aggressive monetary easing by their respective central banks. On the other hand, CTA/managed futures strategies gained the least during the month; rising only 0.29%, a far cry from their strong performance in January. There was a severe reaction against established trends in the energy and US bond markets early during the month, which resulted in losses for many trend following managers. Despite this setback, the bull market in equities and the US dollar remains intact, which were sufficient to cover their losses during this period.

Press release

www.eurekahedge.com

Bg

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. New Launches: Hedge fund Marshall Wace will bet on ESG stocks with new $1bn fund, Stafford Capital raises initial $532m for ninth timberland fund, Nalanda Cap eyes $800m fund, China's Unity Ventures hits first close on US dollar fund[more]

    Hedge fund Marshall Wace will bet on ESG stocks with new $1bn fund From Forbes: Hedge fund Marshall Wace plans to raise $1 billion for a new fund that will invest in stocks with strong environmental, sustainability and governance (ESG) ratings while betting against stocks with poor rating

  2. PPP: Troubled firm Marto Capital asked for PPP money - and got approved, records show, Fallen hedge fund's head among money managers getting PPP relief, Wall Street investors scored emergency government loans amid pandemic, The asset managers approved for PPP money[more]

    Troubled firm Marto Capital asked for PPP money - and got approved, records show From Institutional Investor: Marto Capital - a former wunderkind founded by an ex-Bridgewater Associates star - got approved for emergency funds from the U.S. government, records showed Monday. Katina Stef

  3. PE/VC: Not all VC investors are being slowed down by the pandemic, GP-led secondaries to increase in post-Covid-19 resurgence, Some private-equity firms see early signs of a deal thaw, New York private equity goes for the jugular in Germany[more]

    Not all VC investors are being slowed down by the pandemic From Pitchbook: As the venture capital industry pumped the brakes on dealmaking, a handful of investors are taking a different tack. Among the top 20 most active US VC firms with assets under management of $500 million or more,

  4. Satori Capital buys into hedge fund manager Mountain Cove Capital Management[more]

    Laxman Pai, Opalesque Asia: Dallas-based alternatives manager founded on the principles of conscious capitalism, Satori Capital has agreed to back compatriot investment firm Mountain Cove Capital Management. Satori, a multi-strategy firm with more than $1 billion in assets under management, co

  5. SEC proposes to amend Form 13F[more]

    B. G., Opalesque Geneva: The Securities and Exchange Commission (SEC) said on Friday that it had proposed to amend Form 13F - for the first time in more than 40 years. The proposal will update the reporting threshold (currently at $100m) for institutional investment managers and make other change