Key Takeaways
- • HFR launched the HFRI 400 (US) Indices on March 7, 2023, described as a first-of-its-kind index composed of private hedge funds open to U.S. taxable investors, positioned as a benchmark for U.S. taxable high net worth and ultra-high net worth investors.
- • The HFRI 400 (US) Fund Weighted Composite Index estimated a -0.3% decline in February 2023, following a +2.3% gain in January and reducing the year-to-date return to +2.0%.
- • Event-Driven and Macro strategies led February performance, with the investable HFRI 400 (US) Event-Driven Index gaining +0.64% and the HFRI 400 (US) Macro Index returning +0.56%.
- • The HFRI 400 (US) Equity Hedge Index declined -1.3% and the HFRI 400 (US) Relative Value Index declined -0.2% (estimated) in February.
- • HFR is in strategic discussions with several financial institutions about licensing the HFRI 400 (US) Indices for tracker fund products, building on the HFRI 500 investable index family.
Summary
HFR launched the HFRI 400 (US) Indices, a new investable index family comprised of private hedge funds open to U.S. taxable investors, according to a Business Wire release dated March 7, 2023. HFR, which describes itself as the global leader in alternative investment indexation and analysis, said the indices are designed as a suitable benchmark for U.S.-based, taxable high net worth and ultra-high net worth investors. The new family uses a methodology and construction similar to the HFRI 500 Indices, which serve offshore investors and institutions, and is suitable for operation of HFR-licensed tracker fund products.
Performance figures for February 2023 were estimated as of March 7. The HFRI 400 (US) Fund Weighted Composite Index posted an estimated decline of -0.3%, after a +2.3% gain in January, leaving its year-to-date return at +2.0%. HFR said hedge funds outperformed equity market declines during the month. Event-Driven strategies led performance, with the investable HFRI 400 (US) Event-Driven Index gaining +0.64%, and the HFRI 400 (US) ED: Special Situations Index rising +1.7%. Macro strategies also advanced, with the HFRI 400 (US) Macro Index returning +0.56% and the HFRI 400 (US) Macro: Currency Index gaining +1.9%.
Relative Value and Equity Hedge strategies were mixed. The HFRI 400 (US) Relative Value Index declined an estimated -0.2%, led by the HFRI 400 (US) RV: FI-Sovereign Index, up +0.7%. The HFRI 400 (US) Equity Hedge Index fell -1.3%, with the HFRI 400 (US) EH: Quantitative Directional Index gaining +2.15%.
Kenneth J. Heinz, President of HFR, said hedge fund positioning had helped institutions navigate recent volatility and the breakdown of correlations between equities and bonds, and that the HFRI 400 gives U.S. retail, high net worth and ultra-high net worth investors a robust investable benchmark. Heinz added that hedge funds showed defensive outperformance in February, similar to 2022, as markets reversed risk-on sentiment from January. HFR said it is actively engaged with a number of financial institutions regarding licensing the HFRI 400 (US) Indices for tracker fund operation. HFR Indices are ESMA registered.
Performance figures for February 2023 were estimated as of March 7. The HFRI 400 (US) Fund Weighted Composite Index posted an estimated decline of -0.3%, after a +2.3% gain in January, leaving its year-to-date return at +2.0%. HFR said hedge funds outperformed equity market declines during the month. Event-Driven strategies led performance, with the investable HFRI 400 (US) Event-Driven Index gaining +0.64%, and the HFRI 400 (US) ED: Special Situations Index rising +1.7%. Macro strategies also advanced, with the HFRI 400 (US) Macro Index returning +0.56% and the HFRI 400 (US) Macro: Currency Index gaining +1.9%.
Relative Value and Equity Hedge strategies were mixed. The HFRI 400 (US) Relative Value Index declined an estimated -0.2%, led by the HFRI 400 (US) RV: FI-Sovereign Index, up +0.7%. The HFRI 400 (US) Equity Hedge Index fell -1.3%, with the HFRI 400 (US) EH: Quantitative Directional Index gaining +2.15%.
Kenneth J. Heinz, President of HFR, said hedge fund positioning had helped institutions navigate recent volatility and the breakdown of correlations between equities and bonds, and that the HFRI 400 gives U.S. retail, high net worth and ultra-high net worth investors a robust investable benchmark. Heinz added that hedge funds showed defensive outperformance in February, similar to 2022, as markets reversed risk-on sentiment from January. HFR said it is actively engaged with a number of financial institutions regarding licensing the HFRI 400 (US) Indices for tracker fund operation. HFR Indices are ESMA registered.
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