Preqin’s preliminary benchmarks for February demonstrate an encouraging turnaround compared to the first month of 2014. In contrast to January’s negatively skewed outcome (-0.29%), February revealed uplifting results with hedge funds posting a 1.72% gain. The industry has now returned 6.92% over the last six months and 9.66% for the last twelve months.
Event driven was the top performer among the major hedge fund strategy benchmarks, returning 2.67% in February to record its eighth consecutive monthly gain. With only one lossmaking month suffered during the past year, 12-month returns for event driven funds now stand at 16.04%. Equity markets improved during the month, and there were also strong returns for long/short funds (+2.08%).
Relative value funds extended their run of positive returns to six months with a gain of 0.83% in February. Macro strategies gained 0.56% during the month and commodities funds were the fundamental contributors to this with returns of 3.78%. Emerging markets funds are now up 3.95% over the last six months, having posted 0.94% in the month of February to follow a 2.10% loss in January.
Funds of hedge funds had their best month since January 2013, posting 1.70% for the month. Long/short funds of hedge funds enjoyed a particularly encouraging month (+2.20%), while vehicles with a North American focus (+2.58%) stood out among region-specific multi-manager funds.
Preqin’s benchmarks also reported affirmative returns for UCITS hedge funds, with these funds recording returns of 1.28% in February. This benchmark has now made gains in nine out of the last twelve months and has posted returns of 4.98% for the last six months. Last month’s returns for UCITS funds were primarily driven by long/short funds (+1.95%), with weaker gains from macro strategies (+0.43%) and relative value funds (+0.24%).
CTAs bounced back from the losses they suffered in January (-1.01%) to post gains of 1.76% in February. This represents the CTA benchmark’s best month since July 2012 and brings 12-month returns for CTAs close to positive territory (-0.09%).