Losses abounded in January, but the hedge fund industry largely shielded its investors from the worst. Hedge funds in aggregate were down 2.42 per cent on the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.
January was pretty wretched for broad equity indices, and particularly for technology-focused shares. The S&P 500 Total Return Index was battered by a -5.17 per cent loss and the Nasdaq Composite Index bled -9 per cent.
However, there were a few sunny spots with gains by the Emerging Markets Latin American Equities Index, up 4.94 per cent, the Emerging Markets Latin America Index, gaining 3.07 per cent, the European Equities Index, advancing 1.08 per cent, the Equity Long/Short Index, returning 0.30 per cent, and the Emerging Market Sub-Saharan Africa Index, up 0.03 per cent.
Among the sub-sectors in the red for January the hardest hit were represented by the Healthcare & Biotechnology Index, off -7.17 per cent, the Technology Index, down -6.31 per cent, the Pacific Rim Equities Index, losing -4.96 per cent, the Equity Long Bias Index, giving up 4.10 per cent, and the Emerging Markets Asian Equities Index, retreating -3.95 per cent.
“Investors were spooked by the price increases in the CPI in January, indicating a 7.5 per cent increase in inflation,” says Ben Crawford, Head of Research at BarclayHedge. “Meanwhile, US stocks turned in their worst performance since March 2020, with technology, biotech and growth stocks taking the biggest lumps. Despite that, hedge funds broadly navigated the volatility and bloodletting relatively well—a notch in the industry’s favour as a diversifying agent.”
