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Month in Review – November 2023

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Stockholm (HedgeNordic) – Nordic hedge funds enjoyed their second-best month of the year in November, riding the wave of risk-on sentiment that swept through the markets during the month. The Nordic hedge fund universe rose by 1.6 percent on aggregate, bringing the 2023 performance to 3.5 percent. Most CTAs that entered November anticipating a downtrend in bonds and equities were caught off guard as markets reversed course.

The small group of Nordic CTAs ended November in the red, as stocks rebounded and bond yields tumbled due to signals from the Federal Reserve and other central banks hinting at a possible end to the current cycle of rising interest rates. In contrast, long/short equity managers and fixed-income hedge funds both gained 1.8 percent on average in November. Long-only equity managers performed even better, advancing by 8.7 percent on average last month.

Fixed-income strategies marked their sixth consecutive month of positive performance to bring the 2023 performance to 9.6 percent, a strong recovery from the 7.1 percent average decline in 2022. Diversified hedge funds, the most diverse and inclusive group in the Nordic Hedge Index, gained 1.9 percent on average in November to bring their performance for the year into positive territory at 1.1 percent. Multi-manager vehicles edged up an estimated 0.3 percent in November, ending the first 11 months of 2023 up 2.4 percent.

The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index increased month-over-month. In November, the top 20 percent of Nordic hedge funds gained 5.9 percent on average and the bottom 20 percent lost 2.5 percent, resulting in a top-to-bottom dispersion of 8.4 percent versus 6.0 percent in October. During October, the top 20 percent were up 2.1 percent on average and the bottom 20 percent were down 3.9 percent. About three in every four members of the Nordic Hedge Index with reported November figures posted gains for the month. About 70 percent of all funds within the Nordic Hedge Index posted gains year-to-date.

Top NHX Performers in November

Brobacke Global Allokering, a discretionary multi-asset global macro fund, was the top performer in the Nordic Hedge Index in November with a monthly advance of 11.5 percent. After a period of mixed performance in the first half of 2023, followed by a downturn into negative territory with losses in September and October, Nils Brobacke’s Brobacke Global Allokering experienced a robust recovery in November. The advance was fueled by a multitude of buy signals generated by Brobacke’s short-term models in early November (read more).

Following closely, PriorNilsson Fastighet, a real estate-focused long-biased long/short equity fund at PriorNilsson Fonder, posted an advance of 10.9 percent in November. This upswing propelled the fund’s 2023 performance back into positive territory at 1.6 percent. Pareto Nordic Omega, a Nordic-focused long/short equity fund that is merging into the more globally oriented Pareto Total in early 2024 (read more), demonstrated strong performance with a gain of 9.6 percent in November. Pareto Nordic Omega gained over 10 percent in the first 11 months of 2023.

*Returns for November not reflected.

Formuepleje Penta, which aims to represent an alternative to investing in global equities by maintaining leveraged long-only portfolios in equities and bonds alongside a market-neutral equity allocation, gained 8.3 percent last month. This elevated the fund’s year-to-date performance through the end of November to 12.8 percent. Coeli Global Opportunities, a long/short equity fund run by Andreas Brock and Henrik Milton, also enjoyed a solid performance both in November and so far in 2023. The fund posted a 7.3 percent gain in November and has accumulated a return of 22.5 percent year-to-date.

The Month in Review for November 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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