Hedge Fund Data
Hedge fund industry performance review – January 2025
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In summary
Hedge fund performance was positive in January in a volatile, but generally accretive, month for markets. All hedge fund strategies had positive performance. The average asset weighted hedge fund net return across all strategies was 1.85%. The strongest performing strategy was long biased. Hedge fund performance dispersion was similar to that observed in December.
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Aurum is an investment management firm focused on selecting hedge funds and managing fund of hedge fund portfolios for some of the world’s most sophisticated investors. Aurum also offers a range of single manager feeder funds.
Aurum’s portfolios are designed to grow and protect clients’ capital, while providing consistent uncorrelated returns. With 30 years of hedge fund investment experience, Aurum’s objective is to lower the barriers to entry enabling investors to access the world’s best hedge funds.
Aurum conducts extensive research and analysis on hedge funds and hedge fund industry trends. This research paper is designed to provide data and insights with the objective of helping investors to better understand hedge funds and their benefits.
| HEDGE FUNDS | ||
|---|---|---|
| Hedge fund composite |  | Hedge fund performance was positive in January. All hedge fund strategies had positive performance. The average asset weighted hedge fund net return across all strategies was 1.85%. The strongest performing strategy was long biased. Hedge fund performance dispersion was similar to that observed in December. |
| Long-biased | | Long biased funds monitored by Aurum’s Hedge Fund Data Engine returned an average of 3.19%, the strongest performing master strategy group during the month. Sub-strategy returns were all positive – the best performing was long biased – equity, up 3.65%. |
| Quant | | Quant funds monitored by Aurum’s Hedge Fund Data Engine returned 2.45% on average in January – the strongest month for the strategy since March 2024. Sub-strategy returns were all positive but varied; the strongest performer was quant macro/GAA up 3.63%, the weakest performer was CTAs, up 0.61%. |
| Equity long/short | | Equity long/short funds returned an average of 2.22% in January. All sub-strategies had positive returns, the strongest of which was European long/short – up 2.93%. The weakest sub-strategy was fundamental equity MN, up 0.90%. |
| Macro | | Macro funds monitored by Aurum’s Hedge Fund Data Engine generated an average net return of 1.32% in January. Sub-strategy returns were mostly positive, ranging from macro emerging markets, up 2.50%, to commodities, the only sub-strategy with negative returns, down 1.18%. |
| Multi-strategy | | Multi-strategy funds monitored by Aurum’s Hedge Fund Data Engine returned an average of 1.33% in January. The largest funds (AUM >$5bn) were the strongest performing, while small funds (AUM <$1bn) were the weakest performers. |
| MARKETS | ||
|---|---|---|
| Major events | US tariffs on Canadian and Mexican goods dominated headlines in January. The debut of China’s DeepSeek – a low-cost AI model – was disruptive to US tech stocks. The Fed maintained its target Fed funds range, and expectations fell for upcoming rate cuts. The ECB announced a 25bp rate cut and the Bank of Japan hiked rates by 25bp. | |
| Equities | | Global equities experienced a generally positive month, but with substantial regional variation. European and UK equity markets outperformed those in the US and Asia. The unveiling of China’s DeepSeek AI company adversely impacted AI-focused US tech stocks. |
| Government bonds | | U.S. 10-year Treasury yields rose mid-month due to inflation concerns but settled after the Federal Reserve maintained interest rates at 4.25%. Similarly, European bond yields rose and then fell, following the ECB’s 25bp rate cut. Japanese bond yields increased in anticipation of the BoJ’s 25bp rate hike. |
| Corporate bonds | | Corporate bonds performed well, with all major credit indices posting gains. Investment grade indices advanced, but high yield bonds and emerging market credit outperformed. |
| Currencies | The US dollar moderately weakened against most major currencies in January. The Russian ruble was the biggest mover during the month, staging a notable recovery amidst hopes for a normalisation of relations with President Trump’s administration. Sterling weakened on fiscal concerns. | |
| Commodities | | Commodity indices ended January with generally positive performance. Precious metals were supported by the slight weakness in the US dollar. Oil and natural gas prices experienced intra-month volatility as US sanctions on Russian oil companies and US weather impacted gas demand. |
The Hedge Fund Data Engine is a proprietary database maintained by Aurum Research Limited (“ARL”). For information on index methodology, weighting and composition please refer to https://www.aurum.com/aurum-strategy-engine/. For definitions on how the Strategies and Sub-Strategies are defined please refer to https://www.aurum.com/hedge-fund-strategy-definitions/
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