Hedge funds make money as markets rally

February’s broad market rally saw profits rise for hedge funds, Man’s monthly Hedge Fund Overview research has said.

The MSCI World Index gained 4.7% over the month, while in commodities the S&P GSCI Index gained 6.1% thanks to the rise in Brent of 10.5%. However, bond yields fell as investors swapped safe-haven assets for more risky assets.

Man’s research analyses the industry using several data sources. The HFRI Fund of Funds Composite was up 2.2% for the month and up 5.0% since the start of 2012 to end of February.

Michelle McCloskey, Man’s head of hedge fund research, said: “Hedge funds have made a good start to the year and participated in the broader market rally through high quality security selection and exposure to key commodities markets. Risk appetite remains subdued, however, and we see this positioning continuing until a macro or political event triggers a change in the market environment.”

Equity-hedged managers led in profits, thanks to a global equity rally. Managed futures managers with a long-term trend following bias, global macro managers and relative value and event-driven managers also thrived.

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