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Hedge funds make gains despite market turbulence

hedge_fundsHedge funds made gains in January despite turbulence caused by a surge in trading from retail investors targeting deep value equities that were targets for short sellers. 

Yet despite overall advances, data from Hedge Fund Research showed a wide dispersion in hedge fund performance. 

The top decile of the HFR Index gained 11.6%, while the bottom decile declined -7.8% for the month. Overall, the index gained 0.9% through January. 

Kenneth J. Heinz, president of HFR, said: “Hedge funds effectively navigated the idiosyncratic stock trading volatility which focused on deep value equities with high short interest, with this trend driving gains across event-driven strategies which categorically focus on inexpensive, out of favor equities that are experiencing fundamental, structural transition in the underlying businesses.”

Event-driven strategies led performance in January, with the HFRI 500 Event Driven Index surging 3%. 

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