Amy Bensted, Preqin
Preqin's All-Strategies Hedge Fund benchmark recorded gains of 1.40% in January 2017, the highest January performance recorded since 2013 (+2.59%). This also represents the highest performance month for the industry since April 2016, as funds built on gains of 1.07% seen in December.
All leading hedge fund strategies posted positive performance for the month, with equities strategies (+1.82%) and event driven strategies (+1.70%) funds leading the way. January's positive returns put 12-month performance for the industry at 11.75%, and funds have only recorded two months of losses out of the past 12.
Other Key Hedge Fund Performance Facts:
Returns by Region: All regions saw positive
performance through the month, but emerging markets funds (+3.45%) recorded the
greatest returns. European
funds (+0.76%) saw lower performance than either North America
(+1.26%) or Asia-Pacific (+1.79).
Trading Methodologies: Discretionary and
systematic hedge funds recorded returns of 1.53% and 1.03%
respectively in January. Over
12 months, discretionary funds have returned 12.72%, compared
to 6.62% for systematic funds.
Performance by Size: Large hedge funds with $1bn or more in assets
recorded the greatest monthly gains
of any size classification, at 1.38%. By
contrast, small hedge funds ($100-499mn in AUM) saw the lowest
returns of any size classification, making gains of
Funds of Hedge Funds: Funds of funds recorded modest gains in the month
of 0.99%, building on 0.79%
returns seen in December. Twelve-month net returns jumped to
3.89%, as funds improved on 2.34% losses recorded in January
- Liquid Alternatives: Alternative mutual funds posted returns of 0.96% in January, while UCITS funds gained 0.93%. Over the past 12 months, alternative mutual funds have returned 6.18%, compared to 4.54% for UCITS funds.
- CTAs: In contrast to the wider hedge fund industry, CTA funds saw losses of 0.66% through the month.
Amy Bensted, Head of Hedge Fund Products said: "Hedge funds have had a strong start to 2017, posting their best monthly returns since April, and their best January performance since 2013. In contrast, if we rewind the clock 12 months to January 2016, the industry recorded losses of 2.70%. Given the consistent improved gains the industry recorded through much of the latter part of 2016, this now puts 12-month performance for the industry into double figures for the first time since August 2014. CTA funds, meanwhile, have slipped back into negative territory over the past 12 months.
The largest proportion of investors surveyed in December 2016 cited performance as the leading reason why they had redeemed hedge fund investments over 2016. Therefore, this improved performance of the industry as a whole could help to win over those investors that have become more cautious towards hedge funds."