Australia’s absolute return and hedge funds have again shown their ability to outperform equity indices and long only funds in times of high volatility.
Australia’s absolute return and hedge funds have again shown their ability to outperform equity indices and long only funds in times of high volatility.
With January results now in for nearly half of Australian Fund Monitors’ index of over 200 funds, the average return was 0.65 per cent, against the ASX200 which fell almost five per cent for the month.
Non-equity funds such as managed futures, global macro, commodity and currency funds provided investors even better returns of 1.51 per cent, while single managers (excluding funds of funds) returned 0.70 per cent.
Of equity based strategies, equity market neutral managers performed best, returning 1.94 per cent for the month, and 7.77 per cent for the past 12 months.
Over 12 months AFM’s index has declined 12.96 per cent, compared with the ASX200 fall of around 40 per cent.
At a time when investors are lamenting large losses on their direct equities, managed funds and superannuation investments, the lower volatility of hedge and absolute return funds has defied critics who frequently label them as being high risk.
Australian hedge funds have outperformed the ASX200 in 13 out of 15 months since the market peaked in November 2007.
Local single managers have also largely avoided the frozen redemption issues experienced by many large offshore funds, and some local fund of funds.
