After a five-month string of positive results from April to August, which pulled the hedge fund industry out of the performance hole created in the first quarter of the year as the Covid-19 pandemic ramped up, hedge funds dipped negative in September. Industry-wide average performance stood at -1.01% in September, putting year-to-date (YTD) industry performance at just +1.04%, according to just-released eVestment September 2020 hedge fund performance data.
Only about 36% of hedge funds around the world were able to produce positive results in September, according to eVestment global head of research, Peter Laurelli. Roughly 53% of the industry is producing positive results YTD, with the average gain being +11.96% for the year, while the average decline is -9.97%.
Among primary strategies eVestment tracks, even those that did produce positive aggregate results were just barely in the green last month: Distressed funds saw aggregate returns of +0.93% in September, Origination & Financing funds produced +0.91% aggregate returns and Multi-Strategy funds eked out a +0.46% positive return.
Japan was a bright spot in the hedge fund industry in September, with Japan-focused funds seeing aggregate returns of +3.13% during the month, bringing YTD performance for Japan-focused funds to +0.31%. Japan-domiciled funds saw aggregate returns of +2.32% in September, with these funds coming in at +3.97% YTD.
India-focused funds were another performance bright spot, with returns of +2.97% in September and +1.43% YTD.
Macro funds (at -2.04%) and Managed Futures funds (at -2.51%) in September produced the lowest average returns among primary strategies that eVestment tracks. The markets these funds operate within proved broadly difficult to navigate last month, as only 22% of macro managers and 24% of managed futures funds were positive during the month.
After producing strongly positive aggregate results in August (more than +7% last month), Event Driven-Activist strategies, coming in at -1.50% in September, were also among the poorest performers among primary strategies eVestment tracks. These funds were hurt by broad equity market declines in September and are now negative for performance YTD as well at -0.16%
Within equity and credit hedge fund sub-segments, Energy-focused equity strategies lost the least in September (-0.13%), while those focused on Financials lost most (-2.58%). Equity funds focused on Financials are the biggest performance losers so far this year, at -15.60% YTD.
Source: eVestment September 2020