Hedge Fund Data
Hedge fund industry performance review – February 2025
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In summary
Hedge fund performance was moderately negative in February. Hedge fund strategy performance was mixed; strategies that exhibit a higher long-term correlation to equities generally underperformed. The average asset weighted hedge fund net return across all strategies was -0.15%. The strongest performing strategy was arbitrage and the weakest was equity l/s. Hedge fund performance dispersion was similar to that observed in January.
About Aurum
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 moderately negative in February. Hedge fund strategy performance was mixed; strategies that exhibit a higher long-term correlation to equities generally underperformed. The average asset weighted hedge fund net return across all strategies was -0.15%. The strongest performing strategy was arbitrage and the weakest was equity l/s. Hedge fund performance dispersion was similar to that observed in January. |
| Long-biased | | Long biased funds monitored by Aurum’s Hedge Fund Data Engine returned an average of -0.38%, the second-weakest performing master strategy group during the month. All sub-strategies had negative returns with the exception of long biased – diversified growth. |
| Quant | | Quant funds monitored by Aurum’s Hedge Fund Data Engine returned -0.20% on average in February. The headline negative return for the strategy masked a range of sub-strategy returns. All positive, with the exception of the largest sub-strategy, CTAs, which returned -2.69%. |
| Equity long/short | | Equity long/short funds returned an average of -0.88% in February. Sub-strategy returns ranged from moderately positive to the weakest sub-strategy – sector-focused funds, -2.16%. |
| Macro |  | Macro funds monitored by Aurum’s Hedge Fund Data Engine generated an average net return of 0.10% in February. Sub-strategy returns were varied. For a second month the best performing sub-strategy was macro emerging markets, up 0.57%, and the worst performing was commodities, down 0.59%. |
| Multi-strategy | | Multi-strategy funds monitored by Aurum’s Hedge Fund Data Engine returned an average of -0.22% in February. Funds with AUM between $1bn to $5bn had positive returns, whereas the largest funds ($5bn+) and those with AUM under $1bn had negative average returns. |
| MARKETS | ||
|---|---|---|
| Major events | Trade tensions escalated with reciprocal tariffs between the US and China, reinstated metal tariffs, and new US trade policies. The US government pursued stricter foreign investment measures, targeting China. Meanwhile, the European Union expanded sanctions against Russia, imposing further trade restrictions and financial penalties, increasing geopolitical uncertainty. | |
| Equities | | Global equities saw mixed performance in February. US stocks initially fell on tariff concerns but rebounded mid-month before declining again. Asian markets, led by Chinese tech stocks, surged, while European indices gained on geopolitical optimism and AI investment announcements. Emerging markets struggled. |
| Government bonds | | Bond yields moved in response to shifting economic expectations. US Treasury yields declined as investors sought safety amid a weakening outlook, though inflation data briefly pushed them higher. European yields fell modestly, while Japanese and Chinese yields rose on inflation concerns. |
| Corporate bonds | | Credit markets performed well for a second month, with investment-grade bonds leading gains. US credit indices initially declined on inflation concerns but rebounded as rate cut expectations grew. Emerging market bonds also advanced, with both sovereign and corporate debt posting positive returns. |
| Currencies | The US dollar weakened in February amid trade policy shifts and economic data, while the Japanese yen surged on strong GDP and inflation numbers. The Russian ruble continued its recovery, and rate cuts in the UK, Australia, and India influenced currency movements. The euro remained stable. | |
| Commodities | | Natural gas outperformed in February, driven by cold weather and strong demand, while oil declined amid geopolitical developments. Gold rose on investor demand, but other precious metals fell. Base metals gained moderately, and cocoa was the worst-performing commodity, reversing prior gains. |
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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