Tue, Jun 2, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund managers record modest returns as concerns surrounding the coronavirus outbreak escalate

Tuesday, February 11, 2020
Opalesque Industry Update - The Eurekahedge Hedge Fund Index gained 0.17% in January, outperforming the underlying equity market as represented by the MSCI ACWI (Local), which lost 0.90% over the same period.

Equity markets started the month on a positive note, supported by the de-escalation of the tension in the Middle East, and the signing of the US-China phase-one trade deal.

The S&P 500 and the tech-heavy NASDAQ returned 1.97% and 2.29% respectively for the week ending January 17. However, market sentiment shifted quickly towards the end of the month, following the coronavirus outbreak in China.

Investors feared that the epidemic, which draws parallel to the SARS outbreak in 2003 might significantly weigh on the global economic outlook. The Shenzhen and Shanghai benchmarks were down 8.45% and 7.72% on February 3, after the onshore markets reopened following the Chinese New Year holiday.

The two market benchmarks partially recouped their losses over the following few days thanks to the liquidity injection introduced by the PBOC, as well as the tariff reduction on US imports.

Over in Europe, the FTSE 100 ended January down 3.40%, underperforming other European equity markets as strong British pound weighed on UK equities. Returns were mixed across geographic mandates in January.

Despite the weak performance of the equity markets in the region, fund managers focusing on Asia ex-Japan were up 1.29%, outperforming their North American and European peers who were down 0.30% and 0.24%, respectively.

Japanese hedge funds lost 2.00% over the month of January, underperforming their regional peers. Across strategies, CTA/managed futures, fixed income and distressed debt fund managers were up 0.76%, 0.74%, and 0.61% respectively throughout the month.

Roughly 58.7% of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in January, and 37.6% of the hedge fund managers in the database were able to end 2019 with double-digit returns.

Key highlights for the month of January 2020

Hedge fund managers were up 0.17% in January, despite the uncertainties surrounding the 2019 novel coronavirus which contributed to the weak global equity market performance during the month. The MSCI ACWI (Local) was down 0.90% over the same period.

On an asset-weighted basis, hedge funds were down 0.28% in January, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index was up 6.97% throughout 2019.

The Eurekahedge North American Hedge Fund Index slumped 0.30% during the month, despite the positive geopolitical developments surrounding the US-China trade war and robust corporate earnings result in the region.

The Eurekahedge Greater China Long Short Equities Hedge Fund Index was down 0.40% in January, as concerns over the impact of the coronavirus outbreak on China's economic outlook weighed on the region's equity markets. Equity fund managers focusing on Greater China ended 2019 up 14.77%.

Hedge fund managers utilising fixed income strategies were up 0.74% in January, as market risk aversion supported the global government bond market during the month. The Eurekahedge Fixed Income Index ended 2019 up 7.85%.

Fund managers utilising AI/machine learning strategies returned 2.18% in January. The Eurekahedge AI Hedge Fund Index was up 6.53% in 2019.

The Eurekahedge Crypto-Currency Hedge Fund Index was up 20.49% in January, supported by the strong performance of Bitcoin which ended the month up 31.63%. Fund managers focusing on crypto-currencies gained 16.41% in 2019.

Regional Indices

North American fund managers were down 0.30% in January. The gains of the equity market in the region driven by the development of the US-China trade progress and strong corporate earnings were substantially offset by the losses caused by the concerns surrounding the coronavirus outbreak.

Over in Asia, fund managers with Asia ex-Japan investment mandate ended the month up 1.29%, while the Japan-focused hedge funds ended the month down 2.00%.

Strategy Indices

Returns were mixed across strategic mandates in January with AI and long volatility mandates up 2.18% and 1.11% respectively, as the latter were supported by the heightened market volatility throughout the latter half of the month.

Fixed income managers were also up 0.74%, as global government bonds rallied over the month. Meanwhile, equity long bias managers were down 0.49% in January, contrary to they topped the table with 16.73% return over 2019.

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. Investing: Singer bets on Europe, emerging markets, Britain's unhealthy appetite for financial risk in essential services, How Stan Druckenmiller shook up his portfolio[more]

    Singer bets on Europe, emerging markets From Investment Magazine: William Blair's Brian Singer is looking to invest in Europe and the emerging markets as the recovery from the global economic shutdown to contain the pandemic will likely take longer than what the market has priced in.

  2. PE/VC: How Covid-19 could reshape private equity fundraising, The private equity bet that coronavirus cut short[more]

    How Covid-19 could reshape private equity fundraising From Asian Investor: The pandemic looks may have led to greater use of remote capital-raising but might it also encourage investors to establish more overseas offices? The coronavirus outbreak has inevitably hit the amount of mo

  3. Investing: Millennium hedge fund ups bet against Bank of Ireland, Value rotation was the last thing big funds thought would happen, Al Gore's firm sold Amazon and Microsoft stock. Here's what it bought.[more]

    Millennium hedge fund ups bet against Bank of Ireland From Independent: US hedge fund Millennium International Management has raised its bet against Bank of Ireland's shares. It comes as Davy says 2020 will be a write-off for banks, with losses across Irish lenders of €4bn. M

  4. PE/VC: Private equity in the Covid-19 crisis, Carlyle's Africa dealmakers leave to start their own buyout firm, UK asset managers plan shift to off-market strategies including private equity[more]

    Private equity in the Covid-19 crisis From Morning Star: Private equity investment trusts invest in unquoted companies not yet listed on the stock market. How have they fared in the sell-off? Investment trusts have been caught up in the market turmoil of recent months and private equit

  5. New Launches: Apeira Capital seeks $200m for hedge fund-like bets, PIMCO filing reveals ESG fund launch could be ahead, BEA Systems co-founder launches venture fund, Salesforce Ventures launches $125m Europe Trailblazer Fund, The D. E. Shaw group closes first onshore China investment fund, Legg Mason and ClearBridge launch non-transparent ETF, Hong Kong-based asset manager MaiCapital launches actively managed bitcoin hedge fund[more]

    Apeira Capital seeks $200m for hedge fund-like bets From Bloomberg: Natalie Hwang, the former head of Simon Property Group Inc.'s venture capital arm, has launched a new firm and is seeking $200 million for a debut fund. Hwang has been discussing the vehicle with prospective investors, ac