Hedge funds protected capital against January market drop

By Amal Robleh

Tue Feb 11, 2014

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The Absolute Return Composite Index gained 0.25% in the first month of the year.

Hedge funds ended January with nearly flat performance, rising 0.09% for the month. After years of being maligned for falling behind high-flying equities, January was a reminder that hedge funds can offer outperformance when markets do something other than rise. 

The slight composite return meant many funds were well ahead of the the S&P 500 and MSCI World indices, which dropped a respective 3.46% and 3.70%. 

Commodities funds rose the most, up an estimated 1.39% for the month, though only a small number of funds in that strategy have yet reported their performance, so the final result may differ. This would be the first positive start to the year since 2009. It would also be the second month of positive performance for the index, which had been down from September through November.

Latin American funds had a particularly troublesome start to the year, with the strategy down 5.30%. This is not only the worst January for the Latin American Equity Index, but also its worst return since October 2008 when the median fund fell 6.68%.

Note: These indices were accurate as of February 11, and are subject to change. For the most recent performance statistics, please click on the links in the table below to the individual databases. For a complete list of the top performing funds in each strategy, please visit the HedgeFund Intelligence database.

HedgeFund Intelligence Indices
Median hedge fund returns by region

January YTD
Asia AsiaHedge
-0.27% -0.27%
Europe EuroHedge
0.15% 0.15%
U.S. Absolute Return
0.25% 0.25%
-0.41% -0.41%
Funds of Funds InvestHedge
-0.44% -0.44%
Global Composite HedgeFund Intelligence
0.09% 0.09%

Absolute Return Indices (Americas hedge funds)

Index January YTD
Credit 0.83% 0.83%
Event Driven 0.30% 0.30%
Latin American Equity -5.30% -5.30%
Macro -0.20% -0.20%
Managed Futures -1.83% -1.83%
Multistrategy 0.36% 0.36%
U.S. Equity -1.14% -1.14%
Composite 0.25% 0.25%

Global Benchmarks
Index January YTD
MSCI World Index -3.70% -3.70%
Dow Jones Industrial Average -5.30% -5.30%
S&P 500*
-3.46% -3.46%
NASDAQ Composite -1.74% -1.74%
MSCI Europe Index -2.25% -2.25%
MSCI Pacific Free Index -4.47% -4.47%
* total return

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