The average hedge fund fell below the broad equity market in 2020, but volatility declined. Meanwhile, in a year of pandemics and uncertainties over US elections, equity-selection funds have risen from technology and home equity.
Hedge funds, which have long faced criticism of high fees and sluggish returns aimed at protecting their assets in the midst of market downturns, showed a performance difference in 2020.
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The average hedge fund earned 7.3% in the first 11 months of this year. According to Hedge Fund Research (HFR) data, this was below the index that tracks the S & P 500 at 14% in the same time frame.
Investors think that many of the hedge funds in the portfolio protected their assets with double-digit returns or other means during the March rut, when concerns about coronavirus wiped out $ 5 trillion from US equities. Said that performance is still strong.
Robert Sears, Chief Investment Officer at Capital Generation Partners, said:
Outstanding is the long-short hedge fund, which has proven to have the best strategy. According to recent HFR data, so-called “long-short” hedge funds, betting on rising and falling stock prices, made a profit of 12% during the period. It fell below the wider market, but many individual companies exploded beyond that number with high returns.
“On average, hedge funds were doing very well. They had a fair amount at the beginning of the year,” said Cedric Fontanir, director of investment manager Unigestion and head of investment mandates. Was maintained. “
Many hedge funds, such as Zoom Video Communications Inc and Amazon.com Inc, have invested heavily in stocks that benefited from having consumers and workers at home during the pandemic.
UK-based Marshall Weiss is one of the hedge funds for holding positions in Zoom, as shown by the US filing compiled by Symmetric.io. The company’s knowledgeable sources say it achieved 9.4% with a $ 20 billion strategy for the year starting in December.
Among the long-short hedge funds that generate double-digit returns are RiverPark Advisors’ $ 391 million fund, up 41.2% by October 31, Wellington Management’s $ 1.37 billion financial center. Fund increased by 21.2% by November 30th. Data collected by HSBC and displayed by Reuters.
UK Odey Asset Management earns 37.3% on a long / short fund managed by James Hanbury until November 30th, and Sandler Capital Management’s $ 2 billion equity fund earns 10.8% between the beginning of the year and December 4th. I earned. Both companies told Reuters.
According to the data, hedge fund peers betting on M & A accounted for 5.4% over the same period, and strategies to invest based on macroeconomic trends accounted for 1.4%.
Macro hedge funds generated low profits on average, according to HFR data, but investors said their portfolio strategy outperformed the market.
“Many old guards are doing well again and most macro managers are done in a good year,” said Sears of Capital Generation Partners.
“Even things that didn’t work very well earlier this year did work in later rallies.”
Billionaire Alan Howard’s hedge fund company earned 24% on its $ 4.3 billion macromaster strategy from 2020 to November 30, a source close to the company told Reuters.
Paul Tudor Jones’ Macro Global Fund earned 11.9% until November 30, according to HSBC data.
All hedge funds refused to comment on performance or did not respond to requests for comment.
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Equity Hedge Funds Will Bring Investors Double Digit Profit In 2020
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