Hedge funds continue to perform well out of the gate in 2017, following up strong performance in 2016, according to the just-released eVestment January 2017 Hedge Fund Performance Report. The industry started off 2017 with an average +1.16%, with more than 70% of hedge funds reporting positive results for the first month of the year.
In fact, despite some disappointing performance in a few hedge fund segments, industry results show the importance of using data and market insight to pick the right hedge funds and the importance of hedge funds to a balanced portfolio of investments.
Some interesting points from the January report, according to report author Peter Laurelli, eVestment vice president and global head of research, include:
- Brazil focused hedge funds produced the strongest returns in January, coming in at +7.72%. This follows exceptional +31.14% returns in 2016 but disastrous -29.62% returns in 2015, according to eVestment data, highlighting the tremendous upside and potential volatility in some hedge fund segments.
- Funds focused on the other BRIC countries performed strongly in January, with Russia-focused funds returning +4.10%, India-focused funds returning +4.21% and China-focused funds returning +4.17%. Overall emerging markets-focused funds returned +3.37% in January.
- Among primary strategies in January, Long/Short Equity and Distressed funds were among the stronger performers, returning +1.59% and +1.57% respectively.
- Activist hedge funds, among the strongest performing segments in 2016 with +11.91% returns, started the year off positively, though muted compared to last year, at +0.99%.
- Primary strategies with the weakest performance in January were Macro funds, which returned -0.33%, and Managed Futures funds, which returned -0.74%.
In addition to highlighting performance by major segment, the report looks at performance by size of the fund, categorizing the overall industry into Large (greater than $1 billion in AUM), Mid-Sized (less than $1 billion AUM and greater than $250 million AUM) and Small (under $250 million) funds and splitting major strategies into greater than or less than $1 billion in AUM. The size chart also pulls out and highlights performance among the 10 largest funds in each segment reviewed, a new element to this report.
To download a copy of the full report, please click here.