eVestment: Hedge Fund Aggregate Up +1.08% In February as 70% Of Funds Book Positive Results

Mar 9 2017 | 11:32pm ET

Hedge funds continued their winning streak in February, returned an average of 1.08% during the month - the twelfth month of positive returns in the last thirteen – and bringing year-to-date returns to +2.24%, according to new research provider eVestment.

In the last twelve months, average returns have reached +10.95%, the company noted in its February Hedge Fund Performance Report. Moreover, the strength is broad-based; for the third consecutive month, over 70% of all hedge funds produced positive results, while February marked a much needed rebound for large managed futures funds and continued outperformance by the concentrated equity-focused activist universe. 

For an industry needing to show consistency to stem redemptions, gains in 2017 and over the last twelve months are much needed positive signs, eVestment said. Indeed, following investor redemptions of $106 billion in 2016 and heightened investor and media scrutiny, 2017 is starting off on a very positive note for the industry.

Highlights of the February report:

  • Activist hedge funds ruled the roost in February with an industry-leading +2.53% performance, bringing year-to-date returns to +3.03%.
  • Managed futures funds, which saw a barely positive +0.58% return in 2016, were among the strongest performers in February, racking up +1.32% returns. The largest managed futures funds performed even more strongly, with funds larger than $1 billion returning +2.76% in February and the 10 largest managed futures funds returning +3.36% for the month.
  • Quantitative directional equity funds were also strong performers in February, at +1.65%, bringing their year-to-date returns to +2.41%.
  • Emerging market funds returned +2.05% in February, bringing year-to-date returns to +4.65%. Developed market funds, meanwhile, saw returns of +1.01% in February and +2.30% year-to-date.
  • Funds focused on India and Brazil were among the best performing country-focused funds, returning +4.87% and +4.58% respectively. Brazil has finally emerged from  its extended drawdown and Brazil-focused funds are now the industry’s best in 2017 by a wide margin. 
  • Russia-focused funds, having returned +30.23% in 2016, are having a slower go of it so far this year, returning -0.97% in February and squeaking by with a barely positive +1.03% return year-to-date.
  • Commodity funds were the lone major-category decliner in February, returning -0.50% for the month, bringing year-to-date returns to +0.07%.
  • The largest macro funds continue to outperform their peers. The macro segment has been much maligned in the last couple of years, however performance within the largest funds, on an aggregate basis, has been more than decent. Average returns near 7% in 2016, and 10% in the last twelve months are likely being noticed by investors seeking return outside of traditional primary markets.
  • China-focused funds are up over 6% in 2017. While investor flows have yet to shift to the positive, funds focused on Chinese markets have produced two solid monthly gains to start 2017.

Atlanta-based eVestment was founded in 2000 by Jim Minnick, Matt Crisp and Heath Wilson. The company boasts one of the largest, most comprehensive global databases of traditional and alternative strategies and provides institutional investment data intelligence and analytic solutions to clients worldwide.

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