Stockholm (HedgeNordic) – With just three months left in the year, the Nordic hedge fund industry is on track to deliver its best performance since 2009, after gaining an additional 0.9 percent in September. Year-to-date through the end of September, the Nordic Hedge Index is up 10.7 percent, marking its strongest year since the 13.8 percent return in 2009.
Four of the five strategy categories within the Nordic Hedge Index posted recorded positive returns in September, with fixed-income hedge funds leading the charge for the second month in a row. Long-only equity managers with hedge fund-like characteristics, which fall outside the main Nordic Hedge Index, posted an average gain of 2.0 percent for the month, bringing their 2024 gains to 16.8 percent. Equity long/short funds, on the other hand, edged down 0.04 percent in September, ending the first three quarters of 2024 up at 10.2 percent.
Fixed-income hedge funds gained 1.8 percent in September, pushing their year-to-date advance to 12.5 percent, marking their best year in over a decade. Diversified funds, which include multi-asset, multi-strategy strategies and niche strategies, advanced 1.3 percent in September, with year-to-date gains standing at 8.3 percent. Multi-manager funds added 0.8 percent in September, extending their year-to-date rise to 7.6 percent. Nordic systematic trend-following CTAs, macro and managed futures vehicles within the CTA category gained 14.4 percent over the first nine months of 2024 after adding 0.3 percent in September, with much of the year-to-date advance attributed to Anna Fund’s 170 percent surge.
The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index narrowed month-over-month. The top 20 percent of Nordic hedge funds achieved an average gain of 4.1 percent in September, while the bottom 20 percent experienced an average loss of 2.7 percent, resulting in a top-to-bottom dispersion of 6.8 percent versus 7.3 percent in August. In August, the top 20 percent achieved an average gain of 4.0 percent, while the bottom 20 percent suffered an average loss of 3.3 percent. More than two-thirds of funds with reported figures for August posted gains for the month. About three-quarters of funds with reported figures for September posted gains for the month.
Best Performers in September and Year-to-Date
Avanto Right Tail, a long-biased fund with concentrated positions in liquid investments tied to various themes such as digital assets, cannabis, uranium, green materials, and tankers, was the top performer in the Nordic Hedge Index last month with an advance of 8.4 percent. According to portfolio manager Lars Mikelsen, “During September, the expected and long-awaited rebound occurred in many of our positions.” Special Situations, uranium, and digital assets were the largest contributors. Avanto Right Tail is up approximately 14 percent year-to-date.
Proxy Renewable Long/Short Energy Fund, focused on the energy transition, was close behind with an 8.4 percent gain in September, reducing its year-to-date losses to 10.4 percent. China-related investments were standout contributors during the month. PriorNilsson Fonder’s real estate-focused long/short equity fund, PriorNilsson Fastighet, also had a strong month with a 5.7 percent gain, making it one of the top five performers in the Nordic hedge fund industry this year with a 25.2 percent return.
Atlas Global Macro, the theme-driven hedge fund launched and managed by Lars Tvede, gained an estimated 5.5 percent in September, pushing it into positive territory for the year. The fund has recently reopened to new investors after being closed in early 2022, after the Atlas Global Macro team found a way to reopen the fund without diluting the existing investors’ share of the frozen Russian assets (read more). Two Finnish trend-following funds, Mandatum Managed Futures Fund and Estlander & Partners Alpha Trend Program, also performed well, gaining 5.3 percent and 4.9 percent, respectively. Mandatum Managed Futures Fund, up 20.4 percent year-to-date, is the second-best performing trend-following fund in the Nordics this year, trailing only Anna Fund, which employs a momentum strategy on Bitcoin futures.
Top Performing Long-Only Equity Funds
In September of 2023, 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).
