Hedge Funds Start 2017 on Positive Notes

10 Feb

Hedge Funds Start 2017 on Positive Notes

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.