Stockholm (HedgeNordic) – The Nordic hedge fund industry recorded its second negative month of the year in October, with an average decline of 0.7 percent. This minor setback trimmed the industry’s year-to-date advance to 10.0 percent, still marking its strongest year since the 13.8 percent return in 2009.

Two of the five strategy categories within the Nordic Hedge Index, diversified and multi-manager funds, posted positive returns in October. Diversified funds, which include multi-asset, multi-strategy and niche strategies, edged up 0.3 percent for the month, bringing the year-to-date performance to 8.6 percent. Multi-manager funds added 0.4 percent in October, extending their year-to-date advance to 8.0 percent. Long-only equity managers with hedge fund-like characteristics, which are tracked separately from the main Nordic Hedge Index, also ended the month in positive territory, with the year-to-date gains reaching 17.4 percent. Conversely, equity long/short funds – the largest strategy category in the industry – suffered an average loss of 1.2 percent in October, reducing their year-to-date gain to 8.9 percent.

Nordic systematic trend-following CTAs, macro and managed futures vehicles within the CTA category lost 2.5 percent on average, with most managers experiencing negative returns during the month. Despite this setback, the group remains up 11.5 percent for the year, with much of the gain attributed to the 156 percent surge of Anna Fund, a bitcoin-focused trend-follower. Fixed-income hedge funds edged down 0.1 percent in October, marking the end of a 16-month streak of positive performance. Nonetheless, the category is up 12.7 percent year-to-date, making 2024 its best year in over a decade.

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 2.9 percent in October, while the bottom 20 percent experienced an average loss of 5.1 percent, resulting in a top-to-bottom dispersion of 8.0 percent versus 6.8 percent in September. By comparison, in September, the top 20 percent achieved an average gain of 4.1 percent, and the bottom 20 percent suffered an average loss of 2.7 percent. Exactly half of the funds reporting figures for October posted gains for the month.

Best Performers in October and Year-to-Date

Pensum Global Opportunities, an opportunistic hedge fund managed by Norwegian fund veteran Peter Andersland, emerged as the top-performing Nordic hedge fund in October, securing its position among the year’s ten best performers in the region. After achieving a 14.5 percent gain in the first three quarters, the fund surged 19 percent in October through October 22, before surrendering some gains to close the month with an 8.0 percent increase. The fund’s exposure to uranium and gold mining stocks was the main driver behind its strong performance and subsequent pullback in late October (read more).

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, also posted an 8.0 percent gain in October, bringing its year-to-date performance to 23.0 percent. Borea Utbytte, an equity fund focused on the Norwegian banking sector, gained 7.5 percent in October, boosting its 2024 performance to 25.4 percent. Atlant Edge advanced 6.7 percent during the month, driven primarily by put options against the OMX index and a sharp rally in one if its equity holdings that was sold during the month.

Tidan Fund, a hedge fund specializing in capital structure opportunities, gained 5.4 percent in October, matching its previous best month on record set just two months earlier in August. The fund now ranks as the third best-performing hedge fund in the Nordic region this year, with a year-to-date return of 32.4 percent (read more).

 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).