Stockholm (HedgeNordic) – Although the impact of the market turbulence in early August on hedge funds is still uncertain, one thing is clear: Nordic hedge funds had a strong July. As reflected by the Nordic Hedge Index, the industry posted an average gain of 1.5 percent in July, bringing the year-to-date performance through the end of the month to 9.3 percent. If this 9.3 percent gain were maintained through the end of the year, it would represent the best annual performance for the industry since 2009.
Four of the five strategy categories within the Nordic Hedge Index posted positive returns in July, with equity and fixed-income hedge funds leading the way. Equity hedge funds gained 2.1 percent for the month, though there was significant dispersion in returns, ranging from a negative 6.4 percent to a positive 16.5 percent. With five months remaining in the year, Nordic equity hedge funds are up 10.4 percent for the year. Fixed-income hedge funds saw an average gain of 1.7 percent in July, bringing their 2024 performance to 9.1 percent by the end of July. Diversified funds, which include multi-asset, multi-strategy strategies and niche strategies, also performed well, gaining 1.2 percent in July and achieving a year-to-date advance of 6.8 percent.
Nordic systematic trend-following CTAs, macro and managed futures vehicles within the CTA category edged up 0.3 percent in July, ending the first seven months of 2024 in positive territory at 13.6 percent. A significant portion of this advance, about 10.3 percent, is attributed to Anna Fund, a Norwegian fund employing a momentum strategy on Bitcoin futures, which surged 144 percent in the first seven months of the year. Multi-manager funds saw a slight dip of 0.1 percent in July, reducing their year-to-date gain to 6.2 percent. Long-only equity managers with hedge fund-like characteristics, a category outside of the Nordic Hedge Index, achieved an average gain of 2.4 percent in July to bring their 2024 performance to 16.3 percent.
The performance dispersion between the best- and worst-performing members of the Nordic Hedge Index narrowed again month-over-month. The top 20 percent of Nordic hedge funds achieved an average gain of 4.9 percent in July, while the bottom 20 percent experienced an average loss of 1.4 percent, resulting in a top-to-bottom dispersion of 6.3 percent, versus 7.3 percent in June and 7.9 percent in May. In June, the top 20 percent achieved an average gain of 2.7 percent, while the bottom 20 percent suffered a 4.6 percent loss. Approximately 80 percent of funds with reported figures for July posted gains.
Best Performers in July and YTD
Among the standout performers, activist investor Accendo Capital led the Nordic Hedge Index in July with a 16.5 percent gain, which brought the fund’s year-to-date performance to 27.2 percent. All the names in the fund’s concentrated portfolio contributed positively, with its holding in Impact Coatings up 61 percent for the month. Borea Utbytte, an equity fund exclusively investing in the banking sector, gained 7.4 percent in July, bringing the 2024 performance to a strong 19.9 percent.
Two renewable energy-focused long/short equity funds were also among the top performers in July. Proxy Renewable Long/Short Energy advanced 7.3 percent to trim its year-to-date losses to 11.7 percent, while Coeli Renewable Opportunities gained 6.6 percent in July to push its 2024 performance into positive territory at 8.2 percent. Peter Andersland’s opportunistic long/short equity fund, Pensum Global Opportunities, also had a strong month, advancing 7.1 percent in July and bringing its year-to-date gain to 8.9 percent.
TIND Discovery Fund, a long-biased equity hedge fund specializing in small- and mid-cap stocks, enjoyed a solid July, continuing its impressive trajectory since its launch in late 2023. Managed by Harald Hjorthen and Jon Håkon Findreng out of Oslo, the fund currently ranks as the second-best performing hedge fund in the Nordics this year, with a year-to-date gain of 30.1 percent after recording a 5.9 percent increase in July.
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).
