New York, NY \u2013 Hennessee Group LLC, an adviser to hedge fund investors, announced today that the Hennessee Hedge Fund Index\u00a0advanced +2.51% in\u00a0January,\u00a0while\u00a0the S&P 500\u00a0advanced +4.36%, the Dow Jones\u00a0Industrial\u00a0Average\u00a0increased +3.40%, and the NASDAQ Composite Index\u00a0climbed +8.01%.\u00a0 Bonds also advanced, as the Barclays Aggregate Bond Index increased +0.88% and the Barclays High Yield Credit Bond Index advanced +3.04%.<\/p>\n
\u201cAfter several months of treading water, managers posted profits as stocks rallied on fundamentals, being driven less by macroeconomic and political news and more by underlying company specific fundamentals,\u201dcommented\u00a0Charles Gradante, Co-Founder of Hennessee Group.\u00a0\u201cThe top performing managers were positioned for a January rally and were long stocks that underperformed in 2011.\u201d<\/p>\n
\u201cJanuary was a good month for hedge funds.\u00a0 After a -4.6% decline last year, the industry has a more positive outlook for 2012,\u201d\u00a0said Lee Hennessee, Managing Principal of Hennessee Group.\u00a0\u201cIt is encouraging to see a respectable gain even with managers conservatively positioned.\u00a0 Looking forward, managers are still cautious but are optimistic on the potential to generate positive alpha.\u201d<\/p>\n
Equity long\/short was one of the best performing strategies in January, as the Hennessee Long\/Short Equity Index advanced +2.47%.\u00a0\u00a0Stocks pushed higher in January, led by technology and financials, as U.S. economic data continued to show signs of improvement.\u00a0 In addition, volatility declined as investor sentiment around the European sovereign debt crisis improved.\u00a0 Managers benefitted from improving conditions. Stock-picking generated alpha as volatility and correlation declined, equity market inflows increased, and investors started actively allocating capital to new ideas.\u00a0\u00a0Many managers took advantage of the\u00a0\u201cJanuary Effect\u201d\u00a0by increasing exposures at the beginning of the month.\u00a0 While hedge funds lagged long only benchmarks on a relative basis as shorts and hedges detracted from performance, long\/short equity were able to generate a significant in January with average exposure levels, an encouraging sign for 2012.<\/p>\n
Generally, managers commented that it seems the market wants to go higher as long as Europe stabilizes.\u00a0 Managers are still monitoring the situation in Europe as Greece\u2019s debt problems have not been resolved.\u00a0 However, it seems most feel that the debt issues will be resolved in the long run and are focusing less on short-term political noise, resulting in a decline in volatility.<\/p>\n
The Hennessee Arbitrage\/Event Driven Index advanced +2.31% in January.\u00a0\u00a0The strategy posted its best month since December 2010, with positive contributions across all strategies.\u00a0 Along with an equity market rally, credit markets advanced for the month, with the exception of Treasuries.\u00a0 Spreads on high yield bonds tightened to 654 basis points from 723 basis points, the narrowest level since August 2011, according to the Bank of America.\u00a0\u00a0The Hennessee Distressed Index increased +3.24% in January.\u00a0 <\/p>\n
Long-biased portfolios benefited from the continued market rally and outperformance of underperforming 2011 stocks.\u00a0 The outlook for distressed managers has improved as investors start increasing risk and investing on fundamentals.\u00a0\u00a0The Hennessee Merger Arbitrage Index advanced +1.25% in January.\u00a0\u00a0During the month, corporate credit and M&A deal spreads tightened.\u00a0 While the NYSE\/Deutsche Borse deal fell apart, managers benefited from significant activity in the healthcare and technology sectors.\u00a0 While January deal flow was lacking, managers expect acceleration in deal activity as company valuations are low, interest rates are low, and corporate cash is high.\u00a0\u00a0The Hennessee Convertible Arbitrage Index returned +1.91%\u00a0as the convertible space richened in January.\u00a0\u00a0 Tightening of spreads and improved equity markets were positive drivers for convertible strategies.\u00a0 Non-traditional outright buyers of convertibles remain very active, providing a floor for valuations.<\/p>\n
\u201cDuring the month, bullish sentiment was boosted by dovish Fed comments which left the door open to additional quantitative easing.\u201d\u00a0commented Charles Gradante.\u00a0\u201cMany managers remain concerned about the long term ramifications of continued monetary easing, causing managers to hold gold as a long term hedge.\u00a0 While the precious metal has been volatile, up +14% in January, managers still see significant upside.\u00a0 Most managers have already built full positions but will add on pullbacks greater than 10%.\u201d<\/p>\n
The Hennessee Global\/Macro Index advanced +2.89% in January.\u00a0 International equities advanced, driven by Emerging Markets, as the MSCI EAFE Index increased +5.25%. International managers underperformed due to conservative positioning.\u00a0 Emerging market hedge funds were top performers for the month, as the Hennessee Emerging Market Index advanced +6.15%.\u00a0 In addition to the European sovereign debt crisis and a possible slowdown in China, managers are closely monitoring the political and social unrest in the Middle East and several have concerns about Iran and Syria.\u00a0\u00a0The Hennessee Macro Index increased +1.46% for the month.\u00a0\u00a0 Manager benefited from gains in global equity and credit markets.\u00a0 <\/p>\n
The U.S. Dollar declined against the Euro and Yen.\u00a0 In fixed income, the U.S. treasury curved steepened as longer dated yields rose.\u00a0 Commodity metals rallied, with the S&P Goldman Sachs Commodity Index returning +2.23%.\u00a0 Precious metals outperformed, with gold advancing +13.9% and silver climbing +19.2%.\u00a0 Managers also had gains in agricultural commodities.<\/p>\n","protected":false},"excerpt":{"rendered":"
New York, NY \u2013 Hennessee Group LLC, an adviser to hedge fund investors, announced today that the Hennessee Hedge Fund Index\u00a0advanced +2.51% in\u00a0January,\u00a0while\u00a0the S&P 500\u00a0advanced +4.36%, the Dow Jones\u00a0Industrial\u00a0Average\u00a0increased +3.40%, and the NASDAQ Composite Index\u00a0climbed +8.01%.\u00a0 Bonds also advanced, as […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-27323","post","type-post","status-publish","format-standard","hentry","category-press-releases"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/27323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=27323"}],"version-history":[{"count":3,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/27323\/revisions"}],"predecessor-version":[{"id":27325,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/27323\/revisions\/27325"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=27323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=27323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=27323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}