Key Takeaways
- • HFRX Equity Hedge Index declined 0.12% in September 2014 as global equities fell, driven by US dollar strength, weak European data, geopolitical tensions in the Middle East, and Hong Kong social unrest.
- • HFRX Macro/CTA Index gained 1.54% in September—its fifth consecutive month of gains and strongest monthly performance since 2009—as rising US dollar and equity declines benefited macro and currency trading strategies.
- • HFRX Fundamental Growth Index outperformed with a 1.22% gain in September and 7.08% year-to-date return, led by healthcare and emerging Asia exposure; Fundamental Value Index declined 0.67%.
- • KKR & Co. backed a new hedge fund launched by the former regional chief of York Capital in Asia, marking KKR's first Asia hedge-fund partnership.
Summary
Global hedge funds posted mixed September 2014 results as macroeconomic headwinds pressured equity markets while benefiting currency and macro strategies. The HFRX Equity Hedge Index declined 0.12% for the month as broad equity weakness offset gains in select strategies. Fundamental Growth strategies contributed positively, gaining 1.22%, while Fundamental Value strategies declined 0.67%. Market Neutral strategies posted a 0.35% gain as factor-based and quantitative models performed well.
Macro and currency trading strategies capitalized on September volatility. The HFRX Macro/CTA Index gained 1.54%—the fifth consecutive month of positive performance and its strongest monthly return since 2009—as the surging US dollar and equity market declines created favorable conditions for currency and tactical asset allocation positioning. Emerging markets posted modest gains, with the HFRX Emerging Markets Composite Index up 0.55%, concentrated in emerging Asia equity exposure.
Third-quarter performance reflected broad market stress across geographies. Global equity markets declined amid weak European economic data, social unrest in Hong Kong, and increased Middle East geopolitical tension, partially offset by China's Alibaba IPO success. While US large-cap equities showed resilience, small-cap, energy, and commodity-sensitive sectors declined. European, Russian, Brazilian, and Turkish equities fell, though China, Argentina, Italy, Japan, and Switzerland posted gains.
In strategic developments, KKR & Co. sealed its first Asia hedge-fund partnership, backing a startup founded by the former regional chief of York Capital Management. The move signals KKR's continued expansion into hedge fund strategies across international markets.
Macro and currency trading strategies capitalized on September volatility. The HFRX Macro/CTA Index gained 1.54%—the fifth consecutive month of positive performance and its strongest monthly return since 2009—as the surging US dollar and equity market declines created favorable conditions for currency and tactical asset allocation positioning. Emerging markets posted modest gains, with the HFRX Emerging Markets Composite Index up 0.55%, concentrated in emerging Asia equity exposure.
Third-quarter performance reflected broad market stress across geographies. Global equity markets declined amid weak European economic data, social unrest in Hong Kong, and increased Middle East geopolitical tension, partially offset by China's Alibaba IPO success. While US large-cap equities showed resilience, small-cap, energy, and commodity-sensitive sectors declined. European, Russian, Brazilian, and Turkish equities fell, though China, Argentina, Italy, Japan, and Switzerland posted gains.
In strategic developments, KKR & Co. sealed its first Asia hedge-fund partnership, backing a startup founded by the former regional chief of York Capital Management. The move signals KKR's continued expansion into hedge fund strategies across international markets.
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