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.