The 48th Hedge Weekly incorporating Investment Funds Performance Review by the HSBC Alternative Investment Group for the week ended November 29, 2013, presents a wealth of data on how funds performed in 2013 up to the date analyzed by strategy.
Average returns by strategy as per the report have been shown below in descending order of performance.
|Fund Type||Fund Category||2013 YTD Returns %|
|Equity-Energy||Equity Long/Short||32.75 *|
|Multi-Strategy||Event Driven||20.05 **|
|Equity-Mid-Small Cap||Equity Long/Short||14.7|
|Equity-Real Estate||Equity Long/Short||13.73|
|Trading||Fund of Funds||9.94|
|Equity Diversified||Market Neutral||9.22|
|Credit Long/Short||Credit Long/Short||8.68|
|Event Driven||Fund of Funds||8.16|
|Macro||Fund of Funds||7.86|
|Convertible Arbitrage||Convertible Arbitrage||7.85|
|Long/Short||Fund of Funds||7.21|
|Multi-Strategy||Fund of Funds||6.31|
|Arbitrage||Fund of Funds||4.43|
|Fixed Income Arbitrage||Fixed Income Arbitrage||3.52|
|Statistical Arbitrage||Market Neutral||2.03|
Hedge funds appear to be underperforming
It appears that hedge funds have underperformed the major market indices.
It’s also clear that within hedge funds, equity based funds are clustered at the top of the table, which is not surprising considering the stellar returns witnessed in the US, Europe and Japan.
The strategies showing negative returns are the Macros. Managed futures have a mixed performance appearing both at the top of the pecking order as well as the bottom.
Funds of note
Two funds of note have been marked with asterisks against their category:
*DORSET ENERGY FUND, LTD – CLASS A managed by David M. Knott, Donald Textor had assets of $271M and earned YTD returns of 32.75%. Its objectives are Investing Long / Short in energy and energy-related companies. Emphasis on established companies with a focus on North American exploration and production companies (E&P).
**SFP VALUE REALIZATION FUND managed by Greg McEntyre had $251M assets and earned YTD returns of 66.14%. It is a Tokyo-based hedge fund run by SFP that exploits market inefficiencies by investing in undervalued Japanese companies and implementing changes leading to share price appreciation over a two to four-year period.