Although March already feels like a distant memory amid the turbulence of April, Nordic hedge funds also faced a challenging month back then. All strategy categories, with the exception of fixed-income strategies, recorded losses in March. However, there were bright spots across the board, as two out of every five hedge funds managed to finish the month in positive territory.
March offered an early glimpse into some of the asset allocation challenges that would define April. Among Nordic hedge fund strategies, only fixed-income managers ended the month in positive territory, posting an average gain of 0.8 percent and bringing their first-quarter performance to 3.2 percent. Equity long/short managers recorded an average loss of 3.2 percent for the month, mirroring the results of Nordic systematic trend-following CTAs, macro, and managed futures strategies – many of which struggled in a month marked by sharp reversals.
Diversified funds – including multi-asset, multi-strategy, and niche approaches – also faced a difficult March, posting an average loss of 2.9 percent. This setback pushed their year-to-date performance into negative territory at 1.2 percent. Multi-manager funds similarly struggled to avoid losses during the month, recording an average decline of 1.8 percent. Their performance for the first quarter slipped just below zero, ending at negative 0.5 percent. Long-only equity managers with hedge fund-like characteristics, tracked separately from the main index, fared even worse, with an average loss of 7.4 percent in March, pushing their first-quarter return into negative territory at 4.8 percent.
The performance gap between the best- and worst-performing members of the Nordic Hedge Index stood at 10 percent in March. The top 20 percent of reporting funds delivered an average gain of 2.0 percent, while the bottom 20 percent suffered an average loss of 8.0 percent. Overall, around two out of five funds ended the month in positive territory.
Best Performers in March
Fixed-income hedge funds were the only strategy group to end March in positive territory and were therefore more prominently represented among the month’s top performers. Leading the pack, however, was Pensum Global Opportunities, an equity-focused opportunistic hedge fund. The fund managed by Norwegian veteran Peter Andersland gained 6.4 percent, benefiting from strong performance in gold and silver mining stocks. Additional gains came from the fund’s short positions in U.S. homebuilders, trucking companies, and producers of discretionary consumer goods.
Three fixed-income hedge funds out of Denmark secured the next top spots on the list: Nykredit MIRA Hedge Fund gained 5.5 percent, PPIM Core Fixed Income returned 3.7 percent, and Nordea European Rates Opportunity advanced 3.6 percent.
March was also a strong month for Coeli Energy Opportunities, a long/short equity fund focused exclusively on the renewable energy sector. Short positions contributed 4.5 percent to performance, while the long book detracted by 1 percent overall. Over 70 percent of the fund’s active themes generated profits, with the best-performing theme being ‘Solar,’ which added 2.1 percent. This was driven by successful short positions in tariff-exposed Chinese and European solar equipment companies.
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).
