Hedge fund managers post strongest monthly outperformance over global equities since 2009

Hedge funds registered their strongest outperformance relative to underlying markets since February 2009, outperforming the MSCI AC World Index IMI (Local) by 6.18 per cent in February. Long Volatility/Tail Risk hedge funds led the performance tables and have outshined most other asset classes including gold.

On an asset-weighted basis, hedge funds were down 2.50 per cent in February, as captured by the Mizuho Eurekahedge Hedge Fund Index (USD). The index is currently down 2.76 per cent year-to-date.

The Eurekahedge North American Long Short Equities Hedge Fund Index declined 4.16 per cent over the first two months of 2020, weighed by the US equity market sell-offs toward the end of the month. Underlying constituents for the index have outperformed the S&P 500 Index by 4.40 per cent as of February 2020 year-to-date.

The Eurekahedge Greater China Hedge Fund Index was up 2.55 per cent in February, outperforming the Hang Seng Index by 3.24 per cent and the CSI 300 Index by 4.14 per cent. Optimism over the improving COVID-19 situation in Mainland China and the accommodative policies of the PBOC have provided some support for the region's equity market. On a year-to-date basis, the US$30.3 billion mandate was up 1.07 per cent. 

Hedge fund managers utilising fixed income strategies were down 0.77 per cent in February, in spite of the risk-off sentiment in the market, which boosted global government bonds throughout the month. The Fed and the ECB have signalled potential policy supports to counter the economic slowdown caused by the COVID-19 outbreak, resulting in lower bond yields during the month.

Fund managers utilising AI/machine learning strategies lost 0.32 per cent in February, breaking their streak of five consecutive positive months since September last year. On a year-to-date basis, the Eurekahedge AI Hedge Fund Index is still up 0.51 per cent.

The Eurekahedge Crypto-Currency Hedge Fund Index was down 0.68 per cent in February, outperforming Bitcoin which ended the month down 8.03 per cent. Fund managers focusing on crypto-currencies are up 18.70 per cent over the first two months of 2020.