- A group of hedge funds soared past the sinking market to outperform their peers in February.
- The month saw equities reach a record high on February 19 before tanking deep into correction territory the following week.
- Hedge funds seek to post gains during both market jumps and declines, though not all firms outperformed through the chaotic month.
- Here are three hedge fund giants that bested the S&P 500 through February.
- Visit the Business Insider homepage for more stories.
A small group of hedge funds bested February’s slump and grew investor capital during the worst week for stocks since the financial crisis.
The S&P 500 index sank more than 8% by the end of last month, tumbling into correction territory after notching a record high as recently as February 19. The bearish shift drove new fears of global recession and prompted experts to lower their expectations for global growth as coronavirus tore into major economies.
Many hedge funds aim to drive gains no matter which direction the broad market moves, yet not all firms grew investor capital through the volatile period. Ray Dalio’s Pure Alpha II fund tumbled roughly the same amount as the S&P 500, as did activist investor Christopher Hohn’s Children’s Investment Fund, according to Bloomberg.
Here are three hedge fund titans who significantly outperformed the ailing equities market through February. Bloomberg first reported on the hedge funds’ February figures.
3. Odey European
Monthly performance: down 0.9%
Crispin Odey’s namesake fund inverted the broader market move, declining through the month despite surging through its last week. The bearish fund manager has repeatedly railed against the nearly 12-year-old bull market and forecast major market corrections.
Odey European jumped by 5% in the last week of February alone, Bloomberg reported, soaring on bearish bets against Tesla and oil as coronavirus cases spiked globally.
Monthly performance: up 1%
Ken Griffin’s Citadel posted a modest gain in February with its multistrategy Wellington fund. The hedge fund manages more than $US30 billion worth of assets, and the Wellington fund is up about 4.5% year-to-date even as major US indexes remain deep in the red.
Multistrategy funds generally beat competitors through the tumultuous week. The funds spread investments across several assets including stocks, bonds, interest rates, and currencies, leaning on diversification to insulate from intense volatility.
1. Kepos Capital
Monthly performance: up 5.6%
Mark Carhart’s $US2 billion fund was up less than 1% before February but enjoyed massive gains through the month’s record highs and steep downtrends. The Kepos Alpha Fund is up 5.9% year-to-date, Bloomberg reported.
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