Has the Tide Turned for Macro Hedge Funds?

Some macro strategies are powering ahead, but is it too soon to claim the strategy’s crisis is over?

(March 10, 2014) — Large macro hedge funds posted positive returns in February to offset the losses made in January and pulling up longer track records, research has shown.

In the second month of the year, hedge funds operating a macro strategy made 0.79%, according to data monitor Evestment, which pulled year to date returns to 0.74%.

The main protagonists in this positive performance were large funds, Evestment said, as some of the smaller players continued their recent losing streak.

“Average returns from macro strategies with greater than $1 billion in assets under management was 3.2% in February,” a report from the data firm said, “actually near the top of the industry.”

European asset manager Lxyor found similar statistics from its alternatives index. The group said the strategy had benefitted from a rebound in risky assets.

Those in positive territory profited from equity performance—particularly in Europe—and long positions on precious metals.

Commodity relative value trades and Japanese securities hit the less-well performing funds.

Managed futures funds made some headway after losing 0.94% last year, according to Evestment’s figures. A strong upwards movement in commodities prices saw this group make 2.05% in February dragging its two-month figure to 1.18%.

More generally, hedge funds had their best month in more than two years, reporting returns not seen since January 2012, Evestment said.

Activist strategies performed the best in February, with a 3.20% return, however, all major approaches trailed the S&P 500 Total Return index. This mainstream index rose 4.57% across the shortest month of the year.

Related content: Hedge Fund Fail-Mates & Macro Hedge Funds Suffer Despite Industry Boom