Month in Review – February 2020

Stockholm (HedgeNordic) – Nordic hedge funds declined by 2.0 percent on average in February (89 percent reported), as the industry could not entirely escape the coronavirus-fueled market turmoil. The Nordic Hedge Index is down 1.7 percent over the first two months of 2020.

All five strategy categories in the Nordic Hedge Index posted losses for February, with multi-strategy and equity hedge funds experiencing the worst performance. Equity hedge funds were down 2.5 percent on average in February, as equity markets ended the month with the worst week for investors since 2008. Multi-strategy funds, meanwhile, declined 2.8 percent on average. Funds of hedge funds and CTAs were down 0.8 percent and 0.9 percent, respectively. Fixed-income hedge funds fell by 0.7 percent on average last month.

The dispersion between last month’s best- and worst-performing members of the Nordic Hedge Index increased relative to the previous month, as top performers could not offset the large losses incurred by bottom performers. In February, the top 20 percent of Nordic hedge funds gained 1.4 percent on average, whereas the bottom 20 percent lost 6.8 percent. In January, the top 20 was up 3.5 percent, and the bottom 20 percent lost 2.5 percent. About one-fifth of the members of the Nordic Hedge Index with reported February figures posted gains last month.

Proxy Renewable Long/Short Energy, an energy transition-focused long/short equity fund, was last month’s best-performing member of the Nordic Hedge Index with a return of 7.5 percent. The fund managed by Stockholm-based asset manager Proxy P Management gained 10 percent in the first two months of 2020. Niche long/short equity fund Elementa gained 6.0 percent last month and was up 9.8 percent year-to-date through the end of February.

Atlant Protect, a vehicle designed specifically to protect against market crashes, gained 4.3 percent in February. The fund is up an additional 4.3 percent month-to-date through March 10, which brings the year-to-date performance to 8.1 percent. Volt Diversified Alpha Fund, a Stockholm-based vehicle that relies on machine learning and fundamental data to capture price moves across various markets, delivered a gain of 4.0 percent in February and was up 9.9 percent in the first two months of 2020. Estlander & Partners Alpha Trend gained 2.7 percent in February.

The Month in Review for February can be downloaded below: