Stockholm (HedgeNordic) – Nordic hedge funds delivered solid performance during the roller-coaster month of August, with fixed-income-focused hedge funds leading the charge. The Nordic Hedge Index posted a gain of 0.5 percent for the month, pushing the year-to-date advance to 9.8 percent – the industry’s best year since 2009. Last month’s list of top performers included a broad range of strategies, including equity, fixed income, CTA, and niche strategies.

All five strategy categories within the Nordic Hedge Index posted positive returns in August, with fixed-income hedge funds leading the way. Meanwhile, long-only equity managers with hedge fund-like characteristics, which fall outside the main Nordic Hedge Index, booked an average loss of 1.9 percent for the month to trim their 2024 advance to 14.3 percent. The CTA category also seemed poised for a loss, but strong performances from strong performances by bitcoin-focused momentum fund Anna Fund, Mandatum Managed Futures Fund, and Volt Diversified Alpha Fund lifted the group into positive territory. Nordic systematic trend-following CTAs, macro and managed futures vehicles within the CTA category gained 14.1 percent over the first eight months of 2024, with much of that advance attributed to Anna Fund’s nearly 200 percent surge.

Fixed-income hedge funds gained 1.3 percent in August, bringing their year-to-date advance to 10.6 percent, marking a second consecutive year of strong returns for the group. Equity hedge funds, not far behind, posted a 0.3 percent gain in August, pushing 2024 performance to 10.3 percent. Diversified funds, which include multi-asset, multi-strategy strategies and niche strategies, edged up 0.1 percent in August, with year-to-date gains standing at 6.9 percent. Multi-manager funds gained 0.6 percent on average in August, extending their year-to-date advance to 6.8 percent.

The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index widened month-over-month. The top 20 percent of Nordic hedge funds achieved an average gain of 4.0 percent in August, while the bottom 20 percent experienced an average loss of 3.3 percent, resulting in a top-to-bottom dispersion of 7.3 percent versus 6.3 percent in July and 7.3 percent in June. In July, the top 20 percent achieved an average gain of 4.9 percent, while the bottom 20 percent suffered an average loss of 1.4 percent. More than two-thirds of funds with reported figures for August posted gains for the month.

Best Performers in August and YTD

Anna Fund, a Norwegian fund employing a momentum strategy on Bitcoin futures, leads both the August and year-to-date performance charts, with a surge of nearly 200 percent in the first eight months of 2024. Established in mid-2023 by three Norwegian friends, Anna Fund uses inverse perpetual Bitcoin futures to capitalize on Bitcoin’s price fluctuations. The fund, which began the year managing just under NOK 50 million, grew its assets to NOK 357 million by the end of August.

Another Norwegian standout, equity-focused Imega Fund managed by Petter Kvamme Jensen, was the second-best performer for both August and the year, gaining 8.5 percent in August to bring its year-to-date return to 34.9 percent. Healthcare-focused Rhenman Healthcare Equity L/S also posted strong results, with a 5.3 percent gain in August boosting its year-to-date performance to 23.2 percent.

Excalibur Fixed Income posted a 5.0 percent gain in August, marking its best month in the post-2009 era. Portfolio manager Thomas Pohjanen noted that cheap out-of-the-money options strategies built earlier in the year paid off in August. Among trend-following managers, Mandatum Asset Management’s managed futures strategy stood out with a 4.8 percent gain, while capital structure-focused Tidan Fund followed with a 4.7 percent gain, marking consecutive record months for the fund. 

Top Performing Long-Only Equity Funds

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).