Month in Review – February 2023

Stockholm (HedgeNordic) – On the heels of a 1.9 percent advance in January, Nordic hedge funds continued their positive streak into February with an average gain of 0.5 percent (91 percent reported). Fixed-income hedge fund strategies, most of which endured a difficult 2022, advanced 3.5 percent in the first two months of 2023 to recoup almost half of their 7.2 percent decline in 2022.

Four of the five strategy categories within the Nordic Hedge Index ended February in positive territory, as diversified (formerly multi-strategy) funds edged down 0.3 percent to trim their 2023 advance to 1.4 percent. CTAs edged up 0.1 percent in February, ending the first two months of 2023 in negative territory at 0.4 percent after delivering solid performance in 2022. Equity hedge funds gained 0.7 percent in February to extend their 2023 gains to 3.2 percent, recouping some of 5.0 percent decline experienced in 2022. Fixed-income hedge funds are up 3.5 percent in the first two months of 2023 after gaining 1.2 percent in February. Multi-manager funds, formerly funds of hedge funds, gained 0.4 percent last month to take their 2023 performance to 1.3 percent.

At a country level, Norwegian hedge funds gained the most in February with an average advance of 1.9 percent, led by strong performance from shipping-only long/short equity fund Cleaves Shipping Fund and banking sector-focused Borea Utbytte. Both Finnish and Danish hedge funds gained 0.5 percent on average during the month of February. The Finnish hedge fund industry gained 3.7 percent over the first two months of 2023, while the Danish hedge fund industry advanced 2.2 percent. The Swedish hedge fund industry, which dominates the Nordic hedge fund universe in terms of number of active hedge funds, was flat during the month of February.

The performance dispersion between last month’s best- and worst-performing members of the Nordic Hedge Index decreased month-over-month. In February, the top 20 percent of Nordic hedge funds gained 3.4 percent and the bottom 20 percent lost 2.5 percent, representing a top-to-bottom dispersion of 5.9 percent versus 9.7 percent in January. In January, the top 20 percent were up 7.2 percent on average and the bottom 20 percent were down 2.5 percent. Two in every three members of the Nordic Hedge Index with reported February figures posted gains last month.

Top Performers in February 2023

While February was a mixed month for stocks across the world, the shipping corner of equity markets enjoyed a very strong February. Shipping-only hedge fund Cleaves Shipping Fund out of Norway was last month’s best-performing constituent of the Nordic Hedge Index with a monthly advance of 13.8 percent.

Borea Utbytte, an equity-focused fund investing in the Norwegian banking sector, also enjoyed a strong February after booking a gain of 8.6 percent. The Rookie of the Year 2021 at the Nordic Hedge Award is up 6.6 percent in the first two months of 2023 after edging down 4.8 percent in 2022 and recording an advance of nearly 62 percent in 2021. Long/short equity fund Symmetry Invest, which is celebrating its 10-year anniversary in March (read more), gained 5.1 percent in February to extend its 2023 advance to 9.7 percent.

Svelland Global Trading Fund, a commodity-focused fund managed by Norwegian Tor A. Svelland, is continuing its strong run of performance with an advance of 4.7 percent in February and 9.4 percent so far in 2023. Svelland Global Trading Fund was last year’s best-performing member of the Nordic Hedge Index with a return of 46.7 percent. Quant-driven trend-follower SEB Asset Selection and long-biased long/short equity fund Taiga Fund both advanced 4.4 percent during the month of February.

The Month in Review for February 2023 can be downloaded below: