Month in Review – January 2022

Stockholm (HedgeNordic) – Nordic hedge funds were down 1.9 percent on average in the first month of 2022 (91 percent reported) to wrap up the worst month since March 2020. About one in every three members of the Nordic Hedge Index managed to book gains in January as equity and fixed-income markets suffered steep losses.

All five strategy categories in the Nordic Hedge Index posted a decline in January. After leading strategy performance in 2021, equity hedge funds experienced the worst performance as a group in January this year. Equity hedge fund declined 2.5 percent on average in the first month of 2022, followed by multi-strategy funds with an average decline of 2.0 percent. Fixed-income strategies within the Nordic Hedge Index fell by 1.1 percent on average in January, whereas funds of hedge funds edged down an estimated 0.7 percent. Nordic CTAs, meanwhile, ended the first month of 2022 down 0.6 percent.

At a country level, Finnish hedge funds lost the most in the first month of this year with an average decline of 3.2 percent. Both Danish and Swedish hedge funds fell by 2.0 percent on average in January. The 21 Norwegian hedge funds, meanwhile, edged down 0.7 percent in the first month of 2022.

The performance dispersion between last month’s best- and worst-performing constituents of the Nordic Hedge Index widened month-over-month. In January this year, the top 20 percent of Nordic hedge funds advanced 2.5 percent on average and the bottom 20 percent lost 7.4 percent on average, representing a top-bottom dispersion of 9.9 percent. In December, the top 20 percent were up 5.5 percent on average and the bottom 20 percent were down 4.6 percent. A little over 30 percent of Nordic Hedge Index constituents with reported January figures posted gains last month.

Top Performers in January

Long/short equity fund Elementa was last month’s best-performing member of the Nordic Hedge Index with an advance of 10.1 percent. After booking its first ever down year in 2021 due to its negative net market exposure in an exhuberant stock market, Elementa reached its best month on record in January this year as stock markets hit reverse. “Towards the end of 2021, we had negative contributions from some parts of our short side, these positions all gave back in January,” Marcus Wahlberg, the founder and portfolio manager of Elementa, comments on the January performance (read more).

DNB’s market-neutral equity fund focused on the global telecom, media and technology sectors, DNB TMT Long/Short Equities, followed suit with a monthly gain of 8.7 percent. This is the fund’s best monthly performance since launching in late 2010. Norwegian discretionary macro fund NOR Global Makro gained 6.5 percent last month to recoup some of last year’s decline of 11 percent.

Max Mitteregger’s long/short equity fund Gladiator Fond, which will be merged with Adrigo Small & Midcap L/S under Adrigo’s management later this year, booked a gain of 3.0 percent in January. The Oceanic Hedge Fund, a long/short energy transition and shipping fund established in 2002 by Cato Brahde, advanced close to 3.0 percent in January this year following a full-year advance of 23.6 percent in 2021.

The Month in Review for January 2022 can be downloaded below: