PivotalPath has released their monthly report, the Pivotal Point Of View, which measures performance among more than 2,500 institutionally-relevant hedge funds and spanning $3T of industry assets.
Key Takeaways:
- Volatility spiked in early August before reversing and finishing the month down 8.3%. This impacted the Managed Futures and Global Macro Indices while a number of stock picking strategies continued to show their worth during a choppy period.
- The PivotalPath Composite Index was up 0.3% in August and +7.2% YTD. The Index continues to generate positive alpha of 5.4% relative to the S&P 500 (S&P) over the last 12 months.
- The PivotalPath Equity Sector: Healthcare and Real Estate Indices led the way in August returning 2.2% and 1.8% respectively. The Equity Sector is now the best performing index in 2024 and through the past rolling 12-month period.
- The laggards YTD are Consumer Discretionary (XLY) +4.65%, Real Estate (XLRE) +8.71%, followed by Energy (XLE) +8.87% and Biotech (IBB) +9.07%.
- The Crypto asset class broadly declined in August, with Bitcoin falling 8.68% while Ethereum declined 22.17%. They are still up YTD 38.69% and 9.85%, respectively.
2024 Hedge Fund Performance
Strategy Highlights: Equity indices continues to make their mark
- The Equity Sector Index lead the way in August and YTD (+1.4% MTD, +11.6% YTD). It has returned 18.3% over the past 12 months, versus 23% for the S&P 500. The Equity Sector Index has produced positive alpha vs the S&P of 3.5% over 12 months.
- Following the Equity Sector Index, the top performing indices this year are Equity Quant and Equity Diversified, up 10.9% and 9.6%, respectively. A clean 1, 2, 3 sweep for equity indices.
- However, Alpha generation tells a different story as Credit, Multi-Strat and Global Macro produced the greatest Alpha on a rolling 12-month basis.
- The Managed Futures Index declined 2.8% in August, marking the fourth declining month in a row. YTD through August, the Index remains +2.2%.
- The Global Macro Index declined 1.4% in August with Commodities, Risk Premia and Quant all declining. All sub-sectors remain positive for the year except for Commodities at -0.9%.
Pivotal Context
The Backdrop: The Long-awaited rotation.
- Hedge funds were mostly positive in August alongside choppy markets that saw an extreme spike in volatility and market declines early in the month, followed by a swift recovery.
- The S&P 500 which dropped 8.5% early in the month of August recovered and gained 2.43% for the month and is +19.53 YTD. This makes the S&P 500 the top major US index. The Russell 2000 declined 1.63% and is up 9.4% YTD. The NASDAQ also recovered from early August declines and ended the month up 65bps. It is now +18% YTD.
- During August, the largest gainers were in Real Estate, (RMZ) 6.26%, Consumer Staples (XLP) 5.99% and Healthcare (XLV) 5.06%. Year to date the leading sectors are Financials (XLF) +21.65%, Utilities (XLU) +20.46%, and Communications (XLC) +20.18%.
Read the full report here by PivotalPath