Hedge Funds Trailed Stock Indexes in January, Eurekahedge Says

Hedge funds worldwide were little changed in January, returning 0.01 percent and underperforming global equities as losses in some emerging markets limited gains, according to Eurekahedge Pte.

Last month’s return follows a 10.9 percent gain in the Eurekahedge Hedge Fund Index, which tracks more than 2,600 funds worldwide, in 2010, the Singapore-based data provider said in an e-mailed report. The index rose 2.9 percent in December. More than 30 hedge funds started in January, the firm said, without elaborating.

Hedge funds had a seventh consecutive month of positive returns, helped by better-than-expected earnings, a stronger outlook for the U.S. economy and easing concerns over the European sovereign crisis, Eurekahedge said. Last month’s gain compares with a 2.2 percent advance by the MSCI World Index.

Japan led the increase, with the Eurekahedge Japan Hedge Fund Index returning 1.4 percent as managers leveraged on a stronger yen and earnings that beat estimates, outperforming the Nikkei 225 Stock Average’s 0.1 percent advance, the report said.

North American funds gained 0.7 percent, while European managers returned 0.1 percent, it said. The Eurekahedge Asia ex- Japan Index climbed 0.2 percent.

By contrast, the index tracking Latin American funds declined 0.4 percent as the region’s stocks slid, it said. The MSCI EM Latin American Index lost 4.6 percent last month.

By strategy, managers investing in fixed income were the best performers, returning 2.5 percent as yields rose, the report said.

The report was based on 34 percent of the funds that have announced January results, Eurekahedge said. It plans to release a full version later this month.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.