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Hedge fund industry starts 2020 in the red, but just Barely

Wednesday, February 12, 2020
Opalesque Industry Update - Aggregate hedge fund performance started out 2020 in the red, but just barely, with the industry posting an overall loss of -0.22%, according to the just-released eVestment January 2020 hedge fund performance data. The hedge fund industry closed out 2019 with average return of +9.69%, according to eVestment.

Managed Futures funds were the best performing primary strategy to start 2020, turning in average performance of +1.83% in January. Returns within the group were mostly positive (67% positive), but there were a wide distribution of positive/negative returns among the largest managers. As a result, the 10 largest Managed Futures managers only returned an average of +0.21%.

While January was generally a good start for the Managed Futures segment of the industry, as a group Managed Futures funds need to prove themselves to investors following a few years of volatile returns. These funds closed out 2019 at +7.61%, but were in the red for 2018, returning -6.09%.

Among primary strategies tracked by eVestment, Event Driven - Activist funds were the biggest performance losers, with these funds posting an average return of -1.45% for January. These funds closed out 2019 at +13.38%, which placed them among the strongest performing primary strategies last year.

Long/Short Equity funds also had a difficult start to 2020, returning an average of -1.02% in January. Is there a theme here? Long/Short Equity funds were also among the strongest performing fund segments in 2019, closing last year at +14.16%.

Japan-focused funds saw the most negative returns in January of all fund types eVestment tracks, posting -3.27% returns to start off the year.

India-focused funds started the year on a positive note, posting average returns of +1.10% in January. India-focused funds' positive January returns are a nice start for these funds, which have been in the red the past two years. In 2019 India-focused funds returned -3.14% and in 2018 India-focused funds returned shocking -16.23%.

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