Investor optimism spurred by a variety of favourable conditions pushed hedge funds to a solid start in 2019 with a 3.88 per cent return in January, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.
All of Barclay’s 31 hedge fund indices ended the month with gains.
By comparison, the S&P 500 Total Return Index climbed to 8.01 per cent in January. Strong stock market results and relief from the equity market volatility of recent months clearly contributed to hedge funds’ positive performance in January.
“A robust January effect stock market rally on the heels of a dismal December certainly buoyed the spirits of investors,” says Sol Waksman, president of BarclayHedge. “Hopeful signs that U.S.-China trade talks may avert a trade war and indications that Fed tightening was at a pause helped to fuel the market rebound. And a weaker dollar gave a boost to emerging markets funds.”
Barclay’s hedge fund indices were in positive territory across the board in January. Notably, the Healthcare & Biotechnology Index posted a 10.04 per cent return for the month, the Equity Long Bias Index was up 6.24 per cent and the Balanced (Stocks & Bonds) Index returned 4.33 per cent. Other highlights included a 5.28 per cent return from the Technology Index and a gain of 4.14 per cent from the Event Driven Index.
Several emerging markets indices were among the month’s top performers, led by the Emerging Markets Eastern European Equities Index with a 9.12 per cent return. The Emerging Markets Latin American Equities Index returned 10.90 per cent in January, the Emerging Markets Eastern Europe Index was up 8.25 per cent, the Emerging Markets Latin America Index posted a 9.59 per cent return and the Emerging Markets Global Equities Index was up 6.46 per cent.
