US Election Benefits Activist Hedge Funds in November

09 Dec

US Election Benefits Activist Hedge Funds in November

While investors continue to pull money from hedge funds, the industry is offering performance that may cause some investors to regret those decisions.

Hedge funds turned in a positive 0.55% performance in November, according to the just-released November 2016 eVestment Hedge Fund Performance Report, bringing year-to-date (YTD) performance to +4.46%. While that overall industry average might appear mediocre, pulling out big losers like managed futures and macro funds paints a better picture and some segments are offering up very strong returns.

Some interesting findings from the new report include:

  • Activist hedge funds, which tend to be concentrated in US equity markets, were major beneficiaries of the post-US election rally, turning in performance of +3.62% in November, with YTD performance at +8.82%. The universe overall has produced the best combined 2015/2016 returns, and outperformed the S&P 500 in the process.
  • Brazil funds were hurt most by the resumption of the strong USD trend, seeing returns of -9.95% for the month. However their strong performance this year, coming in at +30.96% YTD, makes them among the strongest hedge fund sectors.
  • Russia-focused funds are also turning in strong performances for the year, averaging returns of +1.10% in November and +29.32% YTD.
  • Distressed funds were another area of strength, with November returns coming in at +1.92%, bringing YTD returns to +11.28%.
  • China-focused funds endured their second monthly loss in a row, coming in at -0.55%, pushing the universe further into negative territory in 2016 with YTD returns of -2.47%.
  • Commodity strategies, which have faced challenges over the past months, posted slight gains in November at +0.12%. The universe had been one of the few successful asset-raisers of 2016, until recent months. A rebound in commodity prices could only benefit this segment, and perhaps alleviate current negative investor sentiment.

To download a full copy of the report, please click here.