Introduction
Hedge funds gained 0.97% during the month of February. Meanwhile underlying markets as represented by the MSCI AC World Index (Local) gained 2.72% over the same period. February was marked by strong performance in US equities on the back of Trump’s fiscal and monetary policy announcements with the S&P 500 ending the month up 3.78%. Economic data out of the US also shed a positive light on the region with a pick-up in inflation bolstered by retail activity. Investor expectations of the rate hike by the Fed were also shaped by an increasingly hawkish Fed suggesting that the next rate hike could occur in the very near future. Among regional mandates Latin American hedge funds managers gained 2.75%, while among strategic mandates distressed debt hedge funds topped the table with 1.34%, followed by event driven hedge funds which gained 1.26% during the month. On a year-to-date basis, hedge funds are up 1.87%, with roughly 11% of managers posting returns greater than 5% over the same period.
Figure 1: February 2017 and January 2017 returns across regions
All regional mandates were in positive territory during the month, with Latin American mandated hedge funds topping the table, up 2.75%. Latin American equity markets performed well in February with the Ibovespa Index up 3.08%. Asia ex-Japan managers were up 1.43% followed by North American managers with gains of 0.76%. European and Japanese managers also ended the month in positive territory and were up 0.52% and 0.40% respectively.
On a year-to-date basis, Latin American hedge fund managers gained 6.56% followed by Asia ex-Japan hedge fund managers which were up3.55%. North American hedge funds managers were up 1.76% followed by Japanese and European managers with gains of 1.67% and 1.16% respectively.
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