Eurekahedge: Hedge Funds Gain 1.43% In January

Feb 10 2015 | 9:26am ET

Hedge funds gained 1.43% in January, according to the Eurekahedge Hedge Fund Index.

Large hedge funds outperformed underlying markets as heavyweights shone with the Eurekahedge Billion Dollar Hedge Fund Index up 1.79% during the month.

Assets under management of multi-strategy hedge funds touched an all time high of $337.5 billion, with managers raking in performance-based gains of $6 billion in January alone, according to the research firm.

Eurekahedge reports that CTA/managed futures funds delivered the best performance among all strategic mandates, up 4.65% in January as managers won big on oil and currency futures.

Distressed debt strategies were down another 2.01% this month, reporting their fifth month of negative returns.

Indian hedge funds were the top performers with gains of 6.80% while Eastern Europe and Russia mandated funds delivered the worst results down 2.46% for the month.

Latin American managers were also down 1.58%, negatively impacted by the broad sell-off in commodities and capital outflows as the MSCI Latin America Index fell 5.15%. Similarly, mangers investing with a Japan mandate realised losses of 1.18% in January, underperforming the benchmark Nikkei 225 which rose 1.28%.

On the other hand, Asia ex-Japan focused hedge funds posted the best returns of 1.47% in January, with Indian managers once again taking the lead this year. European managers came in second place, gaining 0.99% in January which outstripped returns for the entire year of 2014, buoyed by strong underlying markets as the MSCI Europe Index gained 3.79%.

Eurekahedge's Strategy Indices

CTA/managed futures managers once again posted the largest return out of all strategic mandates at 4.65%, attributing gains to short oil positions, the strengthening US dollar and rising European equity market indices. Macro and multi-strategy funds also performed well, up 2.35% and 1.29% respectively. Despite some of the high profile losses on the Swiss franc/Euro bet, macro managers on the whole had positioned themselves well in anticipation of another round of quantitative easing from the European Central Bank, being long European indices and short the Euro and also long US treasuries. Those positions were rewarded handsomely following Draghi’s confirmation of quantitative easing starting in March.

On the other hand, distressed debt and event driven strategies were down the most during the month, losing 2.01% and 1.66%. Managers had jumped on the opportunity to invest in the debt of distressed oil and gas producers following the precipitous drop in oil prices posted losses as those bonds continue to trade at steep discounts due to lingering uncertainty over their issuers’ ability to remain solvent following the continued slump in crude oil prices.

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