Eurekahedge: Hedge Fund Index Gain +0.84% In January On Event-Driven Advance

Feb 14 2017 | 9:05pm ET

Hedge funds continued last year’s late momentum into 2017, according to the latest reading of Eurekahedge’s Hedge Fund Index, although they still underperformed broader market benchmarks. 

The company’s widely followed measure gained 0.84% during the month, continuing the positive trend in place since November of last year but returning less than the 1.49% booked by the MSCI AC World Index (Local) benchmark over the same period. 

Among regional mandates, Latin American hedge fund managers topped the tables, gaining 3.47%, while event driven managers posted the best returns, up 1.95% among strategic mandates, Eurekahedge said. 

Key highlights from January:

  • Over the past year, hedge funds were up 4.54% with managers posting eight consecutive months of gains since February 2016. Close to one-quarter of hedge fund managers posted double digit returns for annual year 2016.
  • Among developed mandates, North American hedge funds were up 1.05%, followed by Japan and European mandated hedge funds which gained 0.75% and 0.57% respectively for January. Over the past year, North American hedge funds managers topped 2016 returns among developed mandates (+7.74%) while Europe and Japan managers posted modest gains.
  • Among strategic mandates, event driven hedge funds posted the best January 2017 returns, gaining 1.95%, followed by long/short equities and distressed debt hedge funds, which were up 1.65% and 1.52% respectively.
  • Emerging market mandates were up 2.41% for the month with strength led by underlying Latin America and Eastern Europe/Russia mandates. Frontier markets, as represented by the Eurekahedge Frontier Markets Hedge Fund Index, was up 2.12% for January.
  • The Eurekahedge CTA/Managed Futures Hedge Fund Index declined 0.65% for the month with underlying trend-following hedge funds leading much of the weakness, down 1.17% over the same period. Underlying FX-focused managers were down 0.49% while their commodity-focused peers gained 1.03%.
  • Asia ex-Japan hedge funds started 2017 on a positive note, up 1.79% for the month with strength led by underlying Greater China focused funds, which gained 2.16% over the same period. India focused hedge funds were also positive with a 4.60% increase during the month. 
  • Among volatility-focused hedge funds, short volatility hedge funds posted the best performance for January, gaining 1.66%, followed by relative value volatility hedge funds, which gained 0.59% over the same period. Over the past year, relative value volatility focused hedge funds posted the best gains, up 7.38%, followed by short volatility focused managers at +5.27%.

Eurekahedge also noted that its Eurekahedge 50 Index has been rebalanced for the new year. The index is comprised of 50 elite hedge funds with strong risk-adjusted returns and combined AUM of almost $150 billion, and was up 4.33% last year – more than 200 basis points more than the average billion-dollar hedge fund.

Eurekahedge’s data was based on 52.61% of funds, which have reported January 2017 returns as of 14 February 2017. The company tracks asset flows, hedge fund performance and regional key trends across the hedge fund universe, tracking more than 130 data points on more than 24,000 alternative funds in its database.

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