Equity, EM Funds Among Big Hedge Fund Winners in January

11 Feb

Equity, EM Funds Among Big Hedge Fund Winners in January

Global hedge funds, which ended a challenging 2018 with an industry aggregate return of -5.05%, started off strong in January, with an industry return just shy of +4% according to eVestment’s January 2019 hedge fund performance data. The industry’s overall +3.91% return in January reversed a trend of five consecutive months of negative industry returns and the average gain was the largest in a month since May 2009 when the average return was +5.14%.

Funds with exposure to the BRIC countries – minus India – were among the big winners in January. Funds focused on Brazil returned +10.70% last month, funds focused on China returned +7.07% and funds focused on Russia returned +6.44%. These funds have a long way to go to make up for their negative returns in 2018 (as low as -16.64% for China-focused funds in 2018), but the positive returns are likely to be welcomed by investors in these funds. India-focused funds were in the red for January, continuing their negative return trend from 2018.

Other interesting points from the latest eVestment hedge fund performance data include:

  • Equity funds were big winners in January. Among primary fund markets, Equity funds returned +5.44% in January, a marked contrast to the -7.53% returns with which these funds ended 2018. And among primary strategies, Long/Short Equity strategies returned +5.97% in January, also a marked turnaround from these funds’ -6.96% returns in 2018.
  • Other strong performers in primary markets were Broad Capital Structure funds and Fixed-Income/Credit funds, which returned +4.26% and +2.66% in January.
  • Across primary strategies, fund performances were almost uniformly positive in January, a contrast to the sea of red for full year 2018. Besides Long/Short Equity funds, other strong performers among primary strategies in January were Distressed funds, returning +4.80%, and Event Driven-Activist funds, returning +4.18%.
  • Among primary strategies, the exception to the overall positive returns were in Managed Futures funds, which were in the red – but just barely – for January at -0.87%. This is a challenging, though not catastrophic, start to the year considering Managed Futures funds were negative for full-year 2018, returning -5.64% last year.

Below is a full look at eVestment’s January 2018 hedge fund data with various historical perspectives.

Industry Benchmarks Jan Last 3mo Q4 2018 2018 2017
Hedge Fund Aggregate 3.91% 1.22% -5.54% -5.05% 8.94%
50% MSCI World/50% Citi WGBI 4.59% 2.69% -5.96% -4.60% 14.75%
S&P 500 8.01% 0.26% -13.52% -4.38% 21.83%
Primary Markets Jan Last 3mo Q4 2018 2018 2017
Equity 5.44% 1.46% -8.04% -7.53% 13.44%
Broad Capital Structure 4.26% 1.03% -5.49% -3.26% 8.88%
Fixed Income/Credit 2.66% 1.14% -2.12% 0.07% 6.04%
Commodities 2.07% -0.33% -3.98% -6.14% 0.43%
Broad Multi-Market 1.95% 0.81% -3.00% -3.85% 4.65%
Volatility/Options Strategies 1.91% 1.63% -1.83% -1.61% 4.81%
FX/Currency 0.90% 0.52% 0.27% 0.90% -3.46%
Broad Financial Derivatives -1.76% -1.29% -2.82% -5.00% 2.33%
Primary Strategy Jan Last 3mo Q4 2018 2018 2017
Long/Short Equity 5.97% 0.61% -9.71% -6.96% 12.13%
Distressed 4.80% 0.55% -5.03% -0.34% 6.64%
Event Driven – Activist 4.18% -2.00% -10.59% -11.33% 11.13%
Event Driven 3.36% 0.35% -4.78% -1.84% 7.42%
Directional Credit 2.72% 0.95% -2.28% 0.69% 5.32%
Convertible Arbitrage 2.71% 1.02% -3.30% -2.15% 5.71%
Multi-Strategy Credit 2.06% -0.17% -2.85% 0.01% 5.70%
Relative Value Credit 1.61% 0.21% -1.92% -0.45% 5.48%
Multi-Strategy 1.29% -0.73% -4.32% -3.38% 6.76%
Macro 1.11% 0.94% -1.51% -2.64% 4.05%
Origination & Financing 0.38% 0.14% -0.73% 4.50% 6.70%
Market Neutral Equity 0.33% -1.37% -2.42% -3.08% 3.57%
Quantitative Directional Equity 0.30% -2.36% -5.53% -4.56% 10.48%
Managed Futures -0.87% -0.15% -2.98% -5.64% 2.74%
Prominent Universes by Size Jan Last 3mo Q4 2018 2018 2017
Ten Largest Hedge Funds 0.45% -0.32% -1.72% -0.34% 4.90%
Ten Largest Long/Short Equity 2.81% 0.14% -5.11% -5.02% 9.09%
Ten Largest Macro -0.23% 0.73% 1.02% 2.26% 2.24%
Ten Largest Managed Futures 0.28% -1.72% -4.44% -6.67% 4.00%
Economic Development Jan Last 3mo Q4 2018 2018 2017
Emerging Markets 5.81% 5.82% -3.49% -10.94% 19.55%
Country Exposure Jan Last 3mo Q4 2018 2018 2017
Brazil 10.70% 9.66% 10.57% -2.02% 15.13%
China 7.07% 6.85% -8.75% -16.64% 34.76%
Russia 6.44% 2.19% -7.28% -13.86% 13.11%
Asia ex-Japan 3.45% 4.24% -4.62% -11.46% 22.13%
Japan 1.17% -3.10% -6.72% -7.96% 13.77%
India -3.77% 4.22% 4.52% -16.46% 32.87%

To review and download more eVestment research reports, please click here.