Hedge funds down 0.18 per cent in January

The hedge fund industry had a downbeat start to the new year losing 0.18 per cent in January, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. 

By comparison, the S&P 500 Total Return Index was more or less break-even with a 0.04 per cent loss in January.

Mixed economic indicators worldwide joined with global events during the month to stunt returns for many hedge fund sectors, resulting in a reversal from December’s 1.73 per cent industry-wide return.

“January was a challenging month for investors, marked as it was by the impact of US-Iran tensions at the start of the month and the beginning of the spread of the coronavirus later in January,” says Sol Waksman, president of BarclayHedge. “Those events offset the potential market benefits of a US-China phase one trade deal and US stocks hitting record highs mid-month.”

Among hedge fund sectors, the picture was mixed in January, with only 15 of BarclayHedge’s 31 indices in the black for the month. The Emerging Markets Eastern Europe Index led the way with a 2.88 per cent return. Other January gainers included the Emerging Markets Eastern European Equities Index, up 2.34 per cent, the Technology Index, returning 1.94 per cent, the Convertible Arbitrage Index, gaining 1.11 per cent, and the Event Driven, up 0.64 per cent.

Sectors in the red for January included the European Equities Index, down 2.38 per cent, the Equity Long/Short Index, off 1.31 per cent, the Volatility Trading Index, losing 1.28 per cent, the Emerging Markets Global Equities Index, down 1.17 per cent, and the Equity Long Bias Index, down 0.90 per cent.