EQUITY HEDGE LEADS HEDGE FUND GAINS INTO YEAR END
HFRI Fund
Weighted Composite posts 11th gain in 13 months;
Macro bids to
turn positive for 2013, snap two year decline
CHICAGO, (December 6,
2013) – Hedge funds extended 2013 gains in November, with positive
contributions across all strategy areas led by Equity Hedge, as the HFRI Fund
Weighted Composite Index posted its 11th gain in the past 13 months,
as reported today by HFR, the established global leader in the indexation,
analysis and research of the global hedge fund industry. The HFRI Fund Weighted
Composite Index gained +1.0 percent for November, the third consecutive monthly
gain, bringing year-to-date (YTD) performance to +8.3 percent.
Equity
Hedge (EH) funds led industry gains for November with the HFRI Equity Hedge
Index climbing +1.2 percent, extending the YTD gain to +12.9 percent, putting
EH on course for the best calendar year since climbing +24.6 percent in 2009. EH
gains were led by funds concentrated in Technology, Healthcare and Fundamental
Value strategies, with the HFRI EH: Technology/Healthcare Index gaining +2.3
percent for November and +19.7 percent YTD, while the HFRI Fundamental Value
Index gained +1.5 percent for November and +18.0 percent YTD. EH gains were partially offset by dedicated
Short Bias funds, which declined -1.3 percent in the month and have declined -15.9
percent YTD.
Macro
strategies posted gains for the 2nd consecutive month despite the
negative influence of declines in underlying Emerging and Commodity Markets.
The HFRI Macro Index rose +1.1 percent in November, narrowing the YTD decline
to -0.2 percent, putting Macro within striking distance of avoiding a third
consecutive calendar year decline. Macro Multi-strategy funds and CTA’s led
gains for the month, with these up +1.9 and +1.3 percent, respectively.
Discretionary Commodity funds gained of +0.4 percent, narrowing the YTD loss to
-4.2 percent while Currency funds declined -0.1 percent. The HFRI Emerging
Markets Index posted mixed performance, declining -0.2 percent for November,
with gains in Emerging Asia and the Middle East partially offsetting declines
in Russia and Latin America.
Event
Driven (ED) funds also posted strong returns for the month, as shareholder
activism continued to drive performance across ED strategies. The HFRI Event
Driven Index gained +0.9 percent in November and +11.0 percent YTD, with
leading contributions from Special Situations and Distressed strategies. The
HFRI ED: Special Situations Index gained +1.1 percent for November and +13.0
percent YTD, while HFRI ED: Distressed Index gained +1.0 percent for November
and +12.3 percent YTD. Activist strategies have led ED performance for 2013
with a gain of +14.4 percent YTD.
Relative
Value Arbitrage (RVA) strategies posted gains for November, despite an increase
in U.S. yields and negative contributions across several interest
rate-sensitive RVA sub-strategies. The HFRI Relative Value Arbitrage Index gained
+0.4 percent for the month, bringing the YTD return to +6.1 percent. RVA gained
were led by Asset-Backed, Volatility and Multi-Strategy exposures, which climbed
+1.3, +1.0 and +0.7 percent, respectively, for November. These were partially
offset by a decline in Fixed Income: Corporate and Sovereign sub-strategies,
which fell -0.5 and -0.7 percent, respectively, for the month.
“Hedge funds have extended gains in recent
months, with Equity Hedge and Event Driven funds leading industry returns as investor
risk tolerance continues to normalize, supported by U.S.-centric equity market
gains, but despite lack of clarity on reduction of U.S. stimulus measures
contributing to mixed performance across global and emerging equity markets,”
stated Kenneth J. Heinz, President of HFR. “Through this improving but transitional
environment, Macro and trend-following CTA funds have only recently begun to
experience improved performance, following calendar year declines in both 2011
and 2012. We expect a continuation of
improved Macro returns to drive overall hedge fund industry gains into early
2014, as investors return to Macro strategies offering low equity and fixed
income correlation, flexible commodity and currency exposures and thematic
approaches through this fluid macroeconomic environment.”
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