Trend-following hedge funds have been able to capitalise on market volatility this year to earn huge returns. The Eurekahegde Trend Following Index, an equally weighted index of 33 constituent funds, is up 14.1% in 2022.
In comparison, the Eurekahedge Hedge Fund Index, the data provider’s flagship index, which is designed to provide a broad measure of the performance of hedge funds across the industry, has declined by -3.6% in 2022. The indexes returned 6.6% and 10% respectively in 2021.
Trend-following Leads the Pack
Trend-following strategies involve identifying and following trends in the market in order to make investment decisions. They are based on the idea that prices in the market are influenced by trends, and that by identifying and following these trends, investors...
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