After a strong showing in January on the back of resurgent risk appetite and rallying markets, hedge funds delivered a more muted performance in February as risk aversion increased during the month. The Eurekahedge Hedge Fund Index was up 0.22%1 during the month, outperforming the underlying markets which finished in negative territory. The MSCI World Index2 was down 0.07% in February.
February witnessed diverging trends among global markets with US and European indices finishing with contrasting results. Risk aversion increased during mid-month and the S&P dropped below the 1500 mark in the third week of February as developments from Europe effected confidence globally. Economic contraction in Europe along with political uncertainty in Spain and Italy dampened some of the bullishness across the board. Although North American bourses rebounded at month-end to finish in the black, European indices finished with losses.
February 2013 and January 2013 returns across regions
Managers across all major hedge fund regions posted profits during the month. Asian hedge funds provided the strongest returns in February – Japanese managers were up 2.51% as the underlying markets continued to rally, although most of the gain was made on the last day of the month. The promise of Prime Minister Abe’s policies have delivered strong gains to the Japanese market and the momentum looks set to continue for a while ...