- The hedge fund industry has not been immune to the coronavirus-fueled stock selloff, with Hedge Fund Research's global index falling 4.51% through the first two weeks of March.
- Some strategies have survived though, or even made money, HFR said. The firm's Systematic Diversified CTA index was up 0.58% at the end of Friday.
- Equity hedge funds have gotten crushed - HFR's overall equity index is down 9% this month, and the one tracking funds that invest in growth stocks is down 16.78%.
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The coronavirus-fueled stock selloff has not spared big names like Ray Dalio, but there are some hedge fund strategies that have seen upside.
Industry tracker Hedge Fund Research sent an update on returns through the first two weeks of the month - when the S&P 500 dropped more than 16% - that shows most hedge funds have not been hit as hard as the overall market, but are still on the downswing.
HFR's global index of all the funds it tracks lost 4.51% through the first two weeks of March, and is down 5.50% for the year. Equity hedge funds have been hit hardest among HFR's indices, with the firm's total equity fund index dropping 9% in the month of March so far (this does not include Monday's massive selloff).
Funds focused on growth, or momentum, stocks have been slammed, according to HFR. That index was down 16.78% through the first two weeks of this month, while value, the investing theory espoused by Seth Klarman and others, is down 5.46% this month, and 8.92% for the year.
At Cliff Asness' AQR, several of the firm's liquid-alternative mutual funds have lost double-digits this year so far, giving a glimpse into how some of its hedge-fund strategies are faring.
Billionaire Lee Ainslie, the founder of equity-focused Tiger Cub Maverick Capital, recently told investors that his plan is to "take advantage of the panic" and buy stocks of companies at a discount, in line with how value investors think about the markets.
Macro managers like Brevan Howard and Greg Coffey's Kirkoswald were the winners last month, notching positive returns while the markets experienced its first round of volatility related to the novel coronavirus pandemic. The overall industry's returns, tracked by HFR, show that these funds have managed well this month as well.
The overall macro/CTA index was down less than 1% through the month, and systematic diversified commodity-trading advisors were even positive over the last two weeks, at 0.58%, and for the year, with 0.26% returns. Quant CTA manager Quest Partners, a $1.5 billion firm based in New York, is an example of a fund riding high - the firm's flagship fund, the $1.4 billion AlphaQuest Original, was up 8.7% through the first two weeks of March, and 17.4% through the end of the year.
Quest's short-biased fund, which targets stocks in the S&P 500 with high amounts of beta, is up 21.47% for March through last Friday, and more than 40% for the year.