Hedge fund allocation is a performance sport, but the question of which performance is ideal is a contentious one. Here, we keep things straightforward by outlining the strategies that we have determined to yield the highest (and lowest) absolute returns.
We display the best and worst managers for each category on a monthly and annual basis based on the most recent return data. This was estimated using our unique composite data streams. These are scored using a straightforward return metric without taking volatility into account and are not filtered for Asset Under Management. Only funds with reported returns for September 2022 are ranked.
The funds in these lists are outliers, ferociously difficult to identify before their magnificent results.
While the majority of performance outliers are driven by unique markets or market effects, the general CTA is frequently trend-driven. Although the best/worst funds have large dispersion, you may still learn a lot about how they and connected strategies respond to changing market conditions. To the see full CTA list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/cta-rankings/
One of the least volatile strategies is market neutral, where returns usually build up over time instead of producing lumpy returns on the upside or downside. Average performance is typically dominated by factor performance, but certain funds may have access to techniques that are not covered by academic factors. To explore our extensive Market Neutral list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/market-neutral-rankings/
As is well known, the underlying equity markets account for 50% of the returns for equities long/short strategies. The performance of the best and worst managers is frequently influenced by peculiar security-specific circumstances. explore our extensive Equity Long/Short-list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/equity-long-short-rankings/
Event-Driven managers frequently encounter distinct arbitrage/spread risks associated with securities in specialized settings. Exploring the causes of underperformance or outperformance for managers with concentrated exposure may provide insights. To explore our extensive Event-Driven list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/event-driven-rankings/
Fixed Income managers are typically influenced by the underlying market conditions, just like Equity Long/Short managers. Managers who are sensitive to a particular subsector are frequently found on this list, particularly those working at the bottom of the capital structure. To explore our extensive Fixed Income list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/fixed-income-rankings/
Risk Premia commonly refers to systematic strategies that have been thoroughly investigated and evaluated are risk premia managers. These could be used as a generic proxy for exposure to hedge funds. The performance of particular factors may show contrasts with expectations. To explore our extensive Risk Premia list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/risk-premia-rankings/
As usual Crypto traders are the wildest bunch on the street. Returns tend to be double-digit (or even triple-digit for the best funds), simply due to the volatility of the asset class. To explore our extensive Crypto Strategy list, with dynamic rankings, please see https://nilssonhedge.com/reports/nilsson-report/crypto-strategy-rankings/
Past performance is not indicative of future results. This communication is intended for qualified investors.