New Year New Returns: Hedge Funds Put Best Foot Forward in 2019

by Ibrahim Mir

  • 19 Feb 2019
  • HF

Hedge funds started 2019 positively, with the Preqin All-Strategies Hedge Fund benchmark generating its highest return since September 2010 (+3.82%). This helped to reverse the losses faced in the final quarter of 2018 (-4.91%) and increased the three-year annualized return to +7.70%. Single manager hedge funds, funds of hedge funds and liquid alternatives all made gains, whereas CTAs struggled (-0.16%).

Event driven strategies hedge funds outperformed all other top-level strategies tracked by Preqin, returning +5.88%; their three-year annualized return (+9.34%) is also the highest out of all strategies. Equity strategies followed closely, posting +5.51% in January. Encouragingly, all top-level strategies began 2019 with positive returns, helped by the rising optimism surrounding global trade.

BRL-denominated hedge funds have enjoyed six consecutive months of outperforming all other currencies, and gained +5.07% in January. This pushes their three-year annualized return to +18.50%; in comparison, the next highest return for this time period is +8.02% for hedge funds denominated in USD.

The start of 2019 provided some much-needed relief globally after a detrimental end to last year: all regions tracked by Preqin made gains in January. Emerging markets-focused hedge funds did particularly well, adding +5.30% to bring their 12-month return to +1.16%. Europe-focused hedge funds had less success, but still gained +2.48%, bringing their 12-month return of -2.76%.

Follow this link to see our Hedge Fund Performance Update: January 2019 factsheet, or browse Insights for recent hedge fund-focused research.

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