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Hedge Fund Industry Starts 2023 on Strong Footing-- Returned 3.67% in January

Emerging Markets and Technology Sectors Among Those Benefitting Most from January Upswing


The hedge fund industry started 2023 strong, posting a 3.67% return in January, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.

By comparison, the S&P 500 Total Return Index gained 6.28% in January.

With one exception, hedge fund subsectors tracked were all in positive territory in January. The month’s leading gainers included the Emerging Markets Eastern Europe Index which was up 7.62%; the Technology Index (+6.71%); the Emerging Markets Global Equities Index (+6.59%); the Emerging Markets Asian Equities Index (+6.18%); and the Emerging Markets Asian Equities Index (+6.18%).

Generally speaking, emerging market managers fared very well in the rally, as evidenced by the return to the Emerging Markets Index, which rebounded +5.16% in January—and the upswing was broad-based, as demonstrated by the Emerging Markets Global Fixed Income Index which was up 4.15% on the month. Elsewhere, heretofore harried sectors of the hedge fund industry also saw robust performance: The Equity Long Bias Index popped 5.02% and the Balanced (Stocks & Bonds) Index showed a gain of 4.41%.

The lone outlier in January was the Equity Market Neutral Index, which was nearly flat with a -0.02% loss for the month.

“Equity markets posted a strong start to the new year in January, as investors reacted bullishly to favorable economic news in the U.S., Europe and China. Slowing inflation numbers combined with buoyant employment figures registered as positive auguries that recessions would be mild, if they came to pass at all,” said Ben Crawford, Head of Research at Backstop BarclayHedge. “Technology stocks were particular beneficiaries of the good news, with the NASDAQ Composite posting its best month since July. Meanwhile, after surviving withering bear market conditions throughout 2022, emerging markets largely saw a change in fortune in January as evidence of slowing inflation and the potential for an end to interest rate hikes sooner rather than later raised hopes of growth.”

For a complete table of BarclayHedge Hedge Fund and Sub-Index results for January, as well as historical returns, click here.


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Malea Lydon

BackBay Communications