Reuters – Hedge funds which trade stocks and those that bet on financial market trends started the year with strong returns of nearly 4 percent, above the gains seen on equity markets, Frenchbusiness school Edhec said on Wednesday.
Long/short equity hedge funds, those that buy and short sell — bet on a lower price for a security in the futures — returned on average 3.93 percent in January compared with 3.16 percent for the MSCI index of world stocks.
“Equity markets generally rose in January,” one hedge fund analyst said. “Hedge funds did better because they picked the right ones to be in and managed to beat the average stock market rise.”
Managed futures funds or commodity trading advisors (CTAs), which make trend bets on stocks, bonds, currencies or commodities using signals from computer trading models, returned 3.88 percent in January.
“Some of that was in currencies, but most of that return was probably in commodities,” the analyst said.
