Using data taken from Preqin’s Hedge Fund Analyst, hedge funds added gains of 1.72% in February which takes the industry benchmark to 1.42% for the year to date. Despite gains of over 2% for some hedge fund strategies, hedge funds lagged wider equity markets and indices, such as the S&P 500 which was up over 4% in February 2014.

hedge-funds-Preqin

Other Key Facts: Hedge fund

  • Event driven funds were the top performing funds in February, making gains of 2.67% and continuing their eight month streak of positive performance.
  • Relative value funds added just 0.83% in February 2014, despite being the top performing fund strategy in January and one of the two strategies to post positive returns in the first month of the year.
  • Emerging markets-focused funds were in positive territory in February, adding net returns of 0.94%; however, this was not sufficient to regain losses of 2.10% in January and its YTD returns of -1.18% makes it the only regional benchmark in the red for 2014.
  • Funds of hedge funds focused on macro strategies have outperformed single-manager macro strategies funds YTD, each posting net returns of 1.27% and 0.19% respectively.
  • CTAs returned to positive territory, adding 1.76% in February 2014, following net losses of 1.01% in January. This is the benchmark’s first monthly return of over 1.50% since July 2012.
  • North America-focused funds posted the highest returns of all regional benchmarks, adding 2.55% in February. This is compared to 1.79% for Europe and 1.28% for Asia-Pacific.

Comment:

“Investors may be reassured that the widespread negative returns across many of Preqin’s hedge fund performance benchmarks in January look to be a temporary blip rather than the start of a longer downward trend. Much of the January losses were led by declining equity markets which struggled at the start of the year following concerns around emerging markets and following the storms in the US.

However, equity benchmarks improved in February, with indices such as S&P 500 reaching record levels; strategies which have a focus on equities, in turn, also saw strong performance for the month. Event driven and long/short funds both posted returns of over 2% in February, taking their 12-month net returns to 16.04% and 11.91% respectively.”

Amy Bensted, Head of Hedge Fund Products – Preqin