Sat, Dec 3, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund managers were down -0.26% in February - recording their second consecutive month of outperformance

Friday, April 01, 2022
Opalesque Industry Update - Hedge fund managers were down -0.26% in February - recording their second consecutive month of outperformance against the S&P 500 which slipped -3.14% during the month. Nearly half of global hedge funds have posted positive returns in February while around 43.0% of them have maintained positive performance over the first two months of the year.

On an asset-weighted basis, hedge funds were down -0.29% in February, as captured by the Eurekahedge Asset Weighted Index - USD. The ability of larger hedge funds to allocate their AUM flexibly to manage volatility enabled them to outperform against their smaller peers during the month.

Billion-dollar hedge funds as represented by the Eurekahedge Billion Dollar Hedge Fund Index were down -0.45% while medium hedge funds as represented by the Eurekahedge Medium Hedge Fund Index posted relatively larger losses of -0.70%.

The Eurekahedge Europe Hedge Fund Index was down -1.46% in February, underperforming their developed market peers as represented by the Eurekahedge North American Hedge Fund Index and Eurekahedge Japan Hedge Fund Index which were up 0.21% and 0.15% respectively. The ongoing conflict between Ukraine and Russia have resulted in a weaker equity market in the region, with DAX and CAC 40 down -6.53% and -4.86% in February.

The Eurekahedge CTA/Managed Futures Hedge Fund Index was up 1.78% in February, outperforming their strategic mandate peers. Fund managers benefitted from the sharp increase in commodity prices due to the ongoing conflict in Ukraine and Russia as the US and their European Allies impose sanctions on Russian oil and gas, exacerbating the already tight global oil supply.

In terms of asset flow, CTA/managed futures fund managers also recorded the largest performance-based gains and investor allocations of US$11.5 billion and US$7.3 billion respectively - posting their highest monthly AUM increase in the history. On the other end of the spectrum, their long/short equities counterpart logged US$13.2 billion of performance-based losses and US$7.0 billion of investor redemptions over the same period.

The Eurekahedge Fixed Income Hedge Fund Index was down -1.44% in February, posting their weakest monthly performance since the market meltdown in March 2020. The higher inflation rates, particularly in the US which is the highest in the last four decades have led into an extremely hawkish Federal Reserve which just raised their fed fund rates by 50 bps this March and are expected to increase again their rate by half percentage point this June.

Emerging markets hedge funds were down -1.28% in February, bringing their year-to-date return to -2.78% over the first two months of the year. The hawkish stance of the Federal Reserve on top of the geopolitical conflict in Eastern Europe have resulted in a stronger US dollar and a weaker equity market in the developing region.

Tail risk and long volatility hedge funds generated positive returns in February and were up 3.81% and 0.84% respectively, driven by heightened market volatility, with the CBOE VIX reaching 31.28 by the end of February. The ongoing war between Russia and Ukraine have triggered risk-off market sentiment throughout the month. On the other hand, their relative value and short volatility peers were down by -1.34% and -0.43% over the same month respectively.

Fund managers focusing on cryptocurrencies gained 4.29% in February, ending their three-month losing streak since November 2021. Despite the ongoing Russia-Ukraine war, Bitcoin was surprisingly less affected by the market volatility, retreating by only -0.58% in February. Russian investors increasingly view digital assets as an alternative way to move financial assets away from the Russian rouble, which has depreciated more than 40% as Russia was banned from accessing the global SWIFT payment system due to sanctions imposed by the US and their European allies.

The Eurekahedge Trade Finance Hedge Fund Index was up 0.53% in February, bringing its year-to-date return to 1.06% as of February 2022. Amidst the rising yields driven by inflationary pressures and geopolitical conflict in the Eastern Europe region between Ukraine and Russia resulting in heightened market volatility, trade finance hedge funds remained resilient by delivering consistent positive returns to their investors.

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. Opalesque Exclusive: Marks delves into what really matters[more]

    B. G., Opalesque Geneva: Howard Marks, co-founder and co-chairman of Oaktree Capital Management, weighs what should and should not matter for investors in his latest memo last week. Among the things t

  2. Legal: British fund manager Jeremy Leach and his firms settle fraud litigation for $11.5m, DOL slams lawsuit seeking to overturn crypto guidance[more]

    British fund manager Jeremy Leach and his firms settle fraud litigation for $11.5m From Offshore Alert: Four days before a trial was due to start in the Cayman Islands, British fund manager Jeremy Leach and eight of his firms settled a fraud complaint by agreeing to pay $11.5 million o

  3. Family offices upbeat on private assets, reduce public assets exposure[more]

    Laxman Pai, Opalesque Asia: Family offices are investing more in private assets and cutting back on investments in public markets, with higher risk-adjusted returns cited as the main driver, said a study. According to the survey findings by German digital private equity firm Moonfare, and the

  4. Opalesque Exclusive: A Swiss managed futures strategy that can offer diversification to any portfolio[more]

    B. G., Opalesque Geneva for New Managers: TARO (R) Diversified is a Swiss algorithmic and systematic investment strategy that offers diversification benefits to almost any professionally managed portfolio through it

  5. Alts manager Medalist Partners acquires a minority stake in Semper Capital to tap opportunities in structured credit[more]

    Laxman Pai, Opalesque Asia: Medalist Partners, which specializes in private credit, has acquired a minority stake in Semper Capital to extend its offerings to the mass market. Medalist currently manages approximately $2.2 billion in assets across strategies in asset-based private credit, struc