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Month in Review – October 2023

Report: Systematic Strategies

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Stockholm (HedgeNordic) – In October, Nordic hedge funds experienced an average monthly decline of 0.5 percent in October, as nearly all asset classes saw negative returns amid a risk-off environment. Despite this, about 44 percent of the Nordic hedge fund universe still delivered positive performance, with long/short equity funds dominating the list of top performers for the month.

Within the six strategies tracked by HedgeNordic, only fixed-income strategies showed a positive result in October, edging up 0.1 percent. This marks their fifth consecutive month of positive performance, contributing to a year-to-date advance of 7.5 percent in the first ten months of 2023. The small group of Nordic CTAs faced an average decline of 1.2 percent, while multi-manager funds edged down 0.3 percent on average.

Diversified hedge funds turned negative for the year after a monthly decline of 0.8 percent in October. Both long/short equity funds and the recently introduced category of long-only equity hedge funds ended the month in the red. Equity hedge funds were down 0.6 percent in October to trim their year-to-date advance to 0.7 percent. Meanwhile, long-only equity funds experienced an average decline of 4.4 percent, bringing their 2023 advance down to 7.5 percent. Despite group booking losses, equity-focused hedge funds still dominated last month’s list of top performers.

The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index slightly decreased month-over-month. In October, the top 20 percent of Nordic hedge funds gained 2.1 percent and the bottom 20 percent lost 3.9 percent, resulting in a top-to-bottom dispersion of 6.0 percent versus 6.8 percent in September. During the month of September, the top 20 percent were up 2.1 percent on average and the bottom 20 percent were down 3.9 percent. About 44 percent of the members of the Nordic Hedge Index with reported October figures posted gains for the month.

Top NHX Performers in October

Pensum Global Opportunities emerged as the top performer in the Nordic Hedge Index for a second consecutive month, gaining 7.9 percent in October after a 9.3 percent gain in September. The opportunistic long/short equity fund overseen by Peter Andersland has rebounded significantly over the past three months, with a cumulative three-month return of 23.2 percent, following a challenging first half of the year.

Joakim Hannisdahl’s long/short shipping hedge fund, Gersemi Shipping Fund, has been enjoying a solid start since launching this summer. The fund is enjoying its fourth consecutive month of positive performance with a cumulative return of 15.8 percent following an advance of 5.6 percent in October. Despite its significant exposure to small-cap stocks, Alcur Fonder’s long-biased long/short equity fund, Alcur Select, posted a gain of 4.4 percent in October amidst turbulent times for Swedish and Nordic small-cap stocks. This performance brought its year-to-date performance further into positive territory at 4.6 percent.

The other shipping fund within the Nordic Hedge Index, Cleaves Shipping Fund, gained 3.8 percent in October. The shipping-only long/short equity-focused hedge fund under the umbrella of Oslo-based Cleaves Securities gained 17.7 percent in the first ten months of 2023. Nordea’s European Rates Opportunity Fund advanced by 3.1 percent in October, trimming its year-to-date decline to 2.6 percent.

Top NHX ELO Performers

In September, HedgeNordic introduced a new sub-strategy category to the Nordic Hedge Index: Equity Long-Only (ELO). This category is home to funds that would fall short of qualifying as a hedge fund due to their long-only trading approach but exhibit habitual characteristics of a hedge fund strategy (e.g., leverage and derivatives usage, portfolio concentration, fee structure, a spin-off of a long/short strategy, and absolute return objectives, among others).

In October, the 11 constituents of the Equity Long-Only category experienced an average loss of 4.4 percent. Despite three consecutive months of losses, the group achieved an estimated gain of 7.5 percent during the first ten months of 2023, driven by strong performance from concentrated equity funds such as HCP Focus, Asilo Argo, Stolt Explorer, HCP Quant and Solerstein Capital. Stolt Explorer performed best in this group in October by edging up 0.1 percent, keeping the fund’s performance in 2023 at 13.6 percent.

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

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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