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For the month of February, hedge funds outpaced the efficiency of main indices, rising 0.3%, in keeping with the PivotalPath Composite Index, whereas the S&P 500 dropped 3.0% and the Nasdaq slid 3.4% in the identical month.
Preqin is seeing sturdy hedge fund returns as properly. Its All-Methods Hedge Fund benchmark returned 3.43% in February, constructing on January’s 2.03% achieve and bringing the 12-month return to nearly 26%.
The composite 12-month beta to the S&P via February was 0.16, information supplier PivotalPath stated.
By technique, managed futures and world macro led all methods in February, producing 2.2% and 1.3% respectively. The fairness sector turned within the worst efficiency, largely from losses within the know-how, media, and telecom and healthcare sub-strategies.
Smaller funds appeared to have an edge on bigger funds final month, with the $500M-$1B AUM corporations clocking in one of the best positive aspects, up 0.45%. Funds with greater than $5B in AUM slipped 0.8% in the identical month.
The worth-over-growth shift continued to realize traction in February, with the PivotalPath proprietary Cyclical Sectors Basket outperforming the Progress Sector Basket by 4.2%.
“Multi-strategy, Managed Futures, World Macro, and Credit score have been constructive for the month and proceed to generate prime of sophistication alpha,” the agency stated. “Commodities, particularly oil, reached recent highs not seen in a decade which, together with continued volatility, benefited World Macro and Managed Futures funds who caught the appropriate facet of the commerce.”
As well as, the hedge fund area has been attracting extra gamers. Quant applied sciences supplier SigTech stated new fund launches stay sturdy, with nearly 2,000 new funds per 12 months, on common, since 2019. Of the 5,500 new hedge funds began since 2019, 70% are based mostly within the U.S., 9% within the U.Okay. and 5.2% in China.
“The sturdy stage of recent hedge fund launches displays a sustained sturdy demand from buyers for modern and uncorrelated funding methods to satisfy return expectations in an more and more difficult market setting,” stated Daniel Leveau, vp, Investor Options, at SigTech.
Crypto is gaining traction as a hedge fund technique. In 2021, some 171 crypto hedge funds have been launched bringing the technique’s complete to 774. Of these, 80% are domiciled within the U.S.
Observe that some extra conventional funding corporations are forming companies that give buyers entry to hedge-fund-like methods. Living proof: Constancy Funding has began a liquid options unit.
Check out the YTD efficiency of ETFs supposed to imitate hedge-fund efficiency: GURU, ALFA, QAI, HDG.