Hedge Funds Were Down 1.12% In November

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According to the latest insights Eurekahedge, Hedge funds down 1.12% in November as emergence of new Omicron COVID-19 variant and hawkish central bank communication weighed on sentiment.

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Hedge Funds Declined -1.12% in November

Hedge fund managers declined -1.12% in November, bringing the YTD gain to a still strong 8.37%. The emergence of the Omicron variant, increasing inflation concerns and hawkish Fed communications triggered risk-off sentiment which led to the global equity market as represented by the MSCI ACWI (Local) declining -2.03% over the month. Around 74.4% of the constituents of the Eurekahedge Hedge Fund Index generated positive returns in 2021.

On an asset-weighted basis, hedge funds declined -1.72% in November, as captured by the Eurekahedge Asset Weighted Index – USD. In terms of 2021 performance, the index is only up 2.51%, highlighting the struggles for some of the larger asset managers over the year.

Fund managers focusing on cryptocurrencies declined -2.09% in November as tracked by the Eurekahedge Crypto-Currency Hedge Fund Index, outperforming Bitcoin which fell -6.52% over the same period. In terms of 2021 return, cryptocurrency hedge funds have gained 171.89%, outperforming Bitcoin which returned 101.03% over the first 11 months of the year.

Eurekahedge North American Hedge Fund Index Declined -0.82%

The Eurekahedge North American Hedge Fund Index declined -0.82% in November, outperforming the DJIA which fell -3.73% over the month. American stock markets came under pressure after Federal Reserve Chairman Jerome Powell indicated that a swifter tapering of asset purchases was under consideration, which surprised market participants given elevated risks from Omicron. On a year-to-date basis, North American fund managers were up 12.61%, recording their best November YTD performance since 2009.

The Eurekahedge European Hedge Fund Index declined -1.38% in November, outperforming the pan-European Euro Stoxx 50 which fell -4.41% over the month. Market risk sentiment was dampened due to the emergence of the new Omicron coronavirus variant which forced some European countries to reintroduce restrictions on activity. On a year-to-date basis, European fund managers were up 6.80%, recording their best November YTD performance since 2013.

The Eurekahedge Asia ex Japan Hedge Fund Index eked out modest gains of 0.02% in November, bringing the YTD gain to 6.95%.  The mandate faced headwinds from the -2.92% decline of the MSCI AC Asia Pacific Ex Japan Index over the month as investors were spooked by the emergence of the Omicron variant of COVID-19 which could render existing vaccines less effective and necessitate the reimposition of restrictive lockdowns.

Article by Eurekahedge

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