From Summer Zhen
HONG KONG, March 8 (Reuters) – Global hedge funds were down 0.5% in February, on the back of weak performance from equities and fixed income as investors rallied amid fears that interest rates would remain high for longer. and a possible global recession, data provider HFR announced on Wednesday.
February’s loss was a reversal of January’s gain and positive momentum over the past few months, but still outperformed key indicators.
Equity hedge funds fell the most over the past month, down 1.3%, while macro, event-driven and relative value strategies gained, according to HFR.
Within the Relative Value Index, which trades on price differentials, the fixed income sub-indices performed mixed as uncertainty about inflation and interest rates made the market volatile.
“Hedge funds showed strong, defensive outperformance against stock market declines in February, driven by gains in quantitative trend-following macros,” HFR President Kenneth J. Heinz said in a presentation.
“Financial markets saw a sharp reversal in risk appetite from January and investors positioned themselves for a continuation of trends of generational inflation, higher interest rates and economic uncertainty,” he said.
Both the S&P 500 and MSCI World Index fell over 2% in February.
Separately, data from Goldman Sachs’ prime brokerage showed that hedge funds increased gross trading activity in US equities, pivoting out of Chinese equities and emerging markets in Asia over the past month.
US and Europe-focused funds fell 1.2% and 0.8%, respectively, while China and Asia-focused funds fell 4.7% and 4.2%, respectively, leading the decline. (Reporting by Summer Zhen; Editing by Kim Coghill)
Comments are closed.