Risk-on surge triggers big long/short gains


January saw a powerful sector rotation in markets as sentiment turned surprisingly and strongly positive, with cyclicals taking over the running from defensives. Although many long/short European equity funds did well, particularly those whose financial stocks rallied, some experienced squeezes as indiscriminate buying pushed their short positions up.

Many of last year’s worst-hit funds posted welcome gains. Sandbourne was up 24.22%, taking three-month figures to 23.88%, and Tosca Mid Cap gained 13.55%, leaving three-month numbers at 3.03%. Henderson European Absolute Return gained 13.02% on the month, leaving three-month figures at 11.24%, and Odey European was up 8.18%, while