The Performance of Hedge Funds in 2024: A Closer Look

Hedge Funds Performance in the First Half of 2024

In the first half of 2024, hedge funds exhibited a mixed performance, with some macro funds like Caxton Associates and Brevan Howard showing modest gains, while certain multi-strategy and systematic funds reported exceptional results.

Macro Funds Performance

Caxton Associates, managed by Andrew Law, specializing in macroeconomic bets, closed last month flat, after a 4% increase from the beginning of the year through the end of May.
On the other hand, Brevan Howard’s flagship fund grew by 0.90% in June but closed the first half of 2024 down by 1.56% for the year.
However, not all macro strategies faced difficulties.
Bridgewater Associates’ flagship fund surged by 14.4% this year until June 26.

Overall Hedge Fund Performance

The HFR Global Hedge Fund Index concluded the first half with a modest gain of 2.89%.
There was a diversification of performances in the sector during a period where the tech boom propelled global markets to new highs.
The wide dispersion in returns often leads benchmark indexes to not accurately reflect the performance of a specific strategy.

Multi-Strategy Funds Performance

Certain multi-strategy hedge funds managed to achieve double-digit returns in the first half of the year.
For instance, Cinctive Capital saw an 11% increase, focusing on AI’s impact on energy, utilities, and tech.
Schonfeld Strategic Advisors’ flagship fund rose by 10.3%, while AQR Apex strategy gained 13.5%.
These funds outperformed industry giants like Citadel and Millennium Management.
Global long/short equity hedge funds saw gains of 7.55% in the first half.

Performance Variability

Top performers boasted gains close to 15%, whereas underperformers fell by 2.22%.
On average, hedge funds struggled to keep up with the MSCI World Index of 47 countries, which surged by around 11% in the first half.
The S&P 500 climbed by 15% in the same period, driven mainly by mega-caps like Nvidia.

Outlook and Challenges

Looking ahead, hedge funds will face more challenges post a strong rally: markets are pricier compared to a year ago, and uncertainty looms larger.
Philippe Laffont’s Coatue Management fund increased by 9.2% in the first half.
Aspect Capital’s diversified fund, operating systematically, yielded a 14.27% return for the year ending June, with gains in agricultural, currency, and equity markets.

In conclusion, the first half of 2024 presented a varied landscape for hedge funds, highlighting the importance of strategic diversity and adaptability in navigating the evolving market conditions.