- Advertisement -
- Advertisement -

Related

‘Ketchup Effects’ Behind Elementa’s Strong November

Latest Report

This year’s Alternative Fixed Income report from HedgeNordic explores how institutional investors and asset managers are navigating this new reality, balancing yield and resilience amid shifting credit cycles, structural change, and evolving sources of return.

Stockholm (HedgeNordic) – After a year of ups and downs, long/short equity fund Elementa made a leap forward in November, gaining 6.0 percent and bringing its year-to-date performance to 7.5 percent. “Historically, the fund stands out in two ways,” says fund manager Marcus Wahlberg. “Firstly, the returns tend to come in installments, as ‘ketchup effects,’* and secondly, the fund performs well in difficult stock market times.”

Since its inception in March 2015, Elementa has demonstrated a tendency to perform well in difficult market environments such as the fourth quarter of 2018, the Covid-affected first quarter of 2020, and the difficult market environment of 2022. Elementa gained 19 percent in 2022, ranking among the best-performing Nordic hedge funds of that year. 

“Historically, the fund stands out in two ways. Firstly, the returns tend to come in installments, as ‘ketchup effects,’ and secondly, the fund performs well in difficult stock market times.”

In November this year, Elementa delivered a 6.0 percent return, outperforming the SIX Return Index, which declined 0.7 percent, and the OMX Stockholm Small Cap Index, which fell 2.9 percent. The fund’s short positions contributed 1.2 percentage points to the month’s return, while the long positions added 4.9 percentage points. “Good one! November was a strong month for the fund, both in absolute numbers and in alpha, although we aim for more for the year,” Wahlberg shares with his investors in the latest monthly letter.

“Good one! November was a strong month for the fund, both in absolute numbers and in alpha, although we aim for more for the year.”

Despite typically maintaining low net market exposure and even negative exposure, Elementa has gradually increased its net exposure from near-zero in early 2023 to over 90 percent, “thanks to the fact that we now see value in many small-cap companies, which hasn’t been the case for many years now,” according to Wahlberg. He further points out that the high net exposure does not reflect existing positions in put options. “During the year, we have adjusted the portfolio construction to amplify the positive impact of our long-side returns, which have been phenomenal,” explains Wahlberg. “We have done so without compromising our ability to do well even when the stock market is weaker.”

*The term ketchup effect is used to describe a situation or event where not much happens for a long time, and then a lot happens at once. It is taken from the well surveyed ritual of shaking a ketchup bottle with nothing coming out, and then, in one go, a big pile of the red tomato sauce ends up on one’s plate.

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

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

Latest Articles

A Story of Data in the Age of Data Deluge

Transtrend started as a research project in 1989. We had bought data and computers, hoping something could be done with that. So, that’s what...

Proxy P’s Bet on Traditional Utilities Amid AI-Driven Power Surge

Since its launch in late 2018, fund boutique Proxy P Management has managed a directional long/short equity fund focused on renewable energy and energy...

November Halts Nordic Hedge Fund Momentum

After six consecutive months of gains, the Nordic hedge fund industry recorded a slight dip in November, edging down 0.3 percent on average. With...

Trade-off Between Illiquidity and Rebalancing Premium

In the search for diversification and higher returns, institutional investors worldwide have steadily increased their exposure to illiquid asset classes such as private equity,...

Diversification in the Era of Monetary Reset

Diversification has long been a cornerstone of investing, designed to balance risk across different markets and asset classes. But with fiat currencies under persistent...

Three Years In, Norselab’s Flagship Fund Reaches More Radars

After years of co-managing Alfred Berg’s high-performing high yield fund, Tom Hestnes has spent the past three years proving his strategy in an alternative...

Allocator Interviews

In-Depth: Diversification

- Advertisement -

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.