North America-focused hedge funds recovered from a 0.69 per cent loss in October to post returns of 2.89 per cent in November, the best performance of any region.
This takes North America funds’ 2016 YTD performance to 9.09 per cent, also the highest of any region.
By contrast, Europe-focused hedge funds posted smaller gains of 0.09 per cent in November, while Asia-Pacific funds suffered losses of 0.47 per cent, taking YTD performance to 1.07 per cent and 1.88 per cent respectively for the two regions.
Overall, November saw positive performance across the hedge fund industry; the Preqin All-Strategies Hedge Fund benchmark recorded gains of 1.00 per cent in November, taking 2016 YTD performance to 6.34 per cent. All top-level strategies saw positive returns for the month, with event driven strategies seeing the biggest gains of 2.34 per cent.
Through 2016 so far, event driven funds have returned 10.74 per cent, the highest of any strategy, while relative value funds have had the lowest YTD performance, returning 4.08 per cent as of the end of November.
In November, emerging markets-focused hedge funds suffered losses of 1.73 per cent, while developed markets posted gains of 0.96 per cent. However, in 2016 YTD vehicles focused on emerging markets have returned 7.91 per cent, above that of developed markets (+5.20 per cent).
In 2016, Preqin’s performance by size classification breakdown in 2016 has largely seen smaller funds post the highest returns. However, in November funds larger than USD1 billion posted 1.10 per cent, the best performance of any size, with emerging and small funds making gains of 0.89 per cent and 0.97 per cent respectively.
CTAs ended their run of negative performance in November, as they returned 0.07 per cent for the month. Despite this, CTA funds have made YTD losses of 0.30 per cent, and 12-month performance is also negative, standing at -1.69 per cent.
2016 has been a positive year for activist hedge funds so far; the trading style recovered from losses in October to post returns of 2.34 per cent in November, and have now made gains of 8.67 per cent in 2016 YTD. Volatility-focused funds also saw gains of 0.85 per cent in November, and have posted only one month of negative performance through the year so far.
“Hedge funds focused on North America generated healthy performance in November and exceeded all other regions, as firms capitalised on opportunities arising from the US election result,” says Amy Bensted, head of hedge fund products at Preqin. “The majority (53 per cent) of hedge fund managers surveyed by Preqin in November said that they expect the performance of their portfolio to profit as a result of the US election over the remainder of 2016. Europe- and Asia-focused funds have seen more marginal gains, but all regions have performed positively over the year so far.
“Overall, the hedge fund industry has rebounded well over 2016 from the difficulties seen at the beginning of the year, and can approach 2017 with optimism, as performance is on track to exceed 2015 and 2014. Although the industry benchmark has not made monthly gains exceeding 1 per cent across most of the year, the run of positive performance from March to September was the longest consistent run of gains seen since 2012-13.”