Stockholm (HedgeNordic) – Stockholm-based QQM Equity Hedge features in BarclayHedge’s list of top ten best-performing equity market-neutral funds over the past five-year period. The market-neutral fund managed by Ola Björkmo and Jonas Sandefeldt generated a cumulative return of 41.2 percent since the beginning of 2013 through the end of 2017, equating to a compounded annual return of 7.2 percent. A decent performance for a fund with no market exposure.
“We are of course pleased to receive this recognition as it demonstrates both the consistency of our fund’s performance throughout various market cycles and the value we can provide investors who are seeking uncorrelated returns,” Ola and Jonas told HedgeNordic.
This NHX constituent fared significantly better than many of its global peers in the past five years. According to research and database provider BarclayHedge, global equity market-neutral funds generated cumulative returns of 23.8 percent on average over the same time span. This figure corresponds to a compounded annual performance of 4.4 percent.
QQM Equity Hedge employs proprietary quantitative models to capture the effects of earnings momentum and earnings surprises in several European equity markets. The combination of long and short positions enables the fund to generate returns that have limited correlation with equity markets. As a case in point, HedgeNordic data show that QQM Equity Hedge’s correlation with the S&P 500 Index since the fund’s inception in early 2008 stands at only 0.09.
Speaking of limited correlation with equity markets, Ola and Jonas told HedgeNordic that “the popularity of systematic managers is growing and we have seen increased interest from allocators in uncorrelated strategies such as market-neutral funds.”
“Instead of focusing on individual stocks and themes, our strategies are purely systematic,” QQM Equity Hedge’s fund managers said about their strategy. “We rely on proprietary models and data analysis to identify investment opportunities across 1000 European stocks in 10 markets. The systematic nature of our process is repeatable, providing the diversification required to avoid concentration risk,” they added.
On a final note, the fund managers quoted Albert Einstein as saying: “Computers are incredibly fast, accurate and stupid; humans are incredibly slow, inaccurate and brilliant; together they are powerful beyond imagination.”