NilssonHedge is proud to present our performance ranking awards for 2020. The awards for 2020 are based on a performance ranking based on returns year-to-date and we present the top three funds for each category. While past performance is not indicative of future results, we should celebrate our successes. NilssonHedge has not done any performance verification, due diligence, and the results presented here are solely based on data that is believed to be representative. Most of the winners represent programs with above-average risk and large drawdown potential and are commonly targeting an institutional investor base. Sometimes, the classification of a strategy is not always clear and it can be discussed if a strategy should belong in a different category. This ranking is based on funds that existed in the database as of the end of January 2021 and had reported returns for the whole year.
Crypto Trading Strategies
Crypto Trading had excellent performance in 2020, often driven by the buoyancy of the Digital Assets that truly recorded strong results in 2020. Most of the winners for the year had a long-biased portfolio and were often invested in Alt Coins. The NilssonHedge Crypto Strategy index recorded a gain of more than 100% and we saw a large number of new launches.
Coincident Capital is a Long/Short Crypto Strategy, primarily trading in BTC and ETH on a swing basis. The fund has grown over 2020 and is now one of the larger Crypto Funds. Return for 2020 was over 750%.
Lavaliere Capital manages a crypto strategy that is described as “quantamental” and mixes a quantitative approach with a fundamental understanding of markets. The manager returned over 600% in 2020.
Diversitas is a crypto strategy that is one of the strategies available via ICONOMI. The performance is driven by shifting assets between various digital assets. The performance of the fund exceeded 500% in 2020.
CTA
CTAs had a reasonably strong year in 2020, with the performance recovering in the second half of the year. The NilssonHedge CTA index ended up with a performance of slightly more than 6%. The best funds had a performance that was multiples of the average number, often at high risk.
Purple Valley Diversified Trend is systematic trend-following strategy trading over 40 markets. We noted performance of close to 200% for the strategy which made the strategy a winner by a large margin.
Smart Vol is a strategy that seeks to harvest the Risk Premium in VIX Futures. The strategy benefited from the market turmoil in February and March as volatility spiked. The program generated in excess of 150% for 2020.
AIS is a discretionary macro strategy, but also a stalwart of the CTA industry. With a 22-year track record, the Multi-Asset Allocation Portfolio has delivered a different return stream. Performance for 2020 was partly driven by a fondness for Gold and was barely shy of 150%.
Equity Long/Short
Most of the high performing Equity Long Short strategies maintained a tactical stance and were able to increase exposure to equities in the second half of the year. Most of the winners for the year are driven by a discretionary process and maintains a concentrated or thematic portfolio. On average, an Equity L/S manager delivered 6% for the year.
St Petri Capital is a fund seeking to exploit thematic investments, in an uncorrelated manner through managing a long/short book. Recent themes include “Retail Transition” and “Technology”. The fund relieved above 90% for 2020 as several of their themes proved to be extraordinarily profitable.
Proxy P is an Equity L/S strategy focused on the Energy Transition Theme. The fund returned above 80% for 2020. A directional fund, using both long and short positions where the net exposure is relatively high. The fund was launched in late 2018 and is a relative newcomer and 2020 presented an excellent trading environment for the fund.
Alcur Select is a concentrated Discretionary strategy focused on the Nordics, with a high net exposure to equities (~100%) which is combined with a sizeable short book (gross exposure ~1.5x). The fund is closed and returned close around 70% for 2020.
Event Driven
Event Driven managers suffered a short drawdown during the height of the pandemic but bounced back quickly. Spreads widened and tightened in a way that was generally conducive for trading events, capital structure, and special situations. Our index delivered close to 5% for the year.
Water Island Long/Short is a catalyst driven strategy investing in securities that are event sensitive. The fund typically has a net long exposure. The fund excelled into the end of 2020 and managed to return in excess of 40%.
Odey is one of the stalwarts of the Event-Driven community and the recently launched Special Situation fund had a strong 2020, with a 40% return. The fund has been described as “Green and Growing” and has certainly delivered growing and green returns.
Formue Nord’s market neutral seeking to deliver uncorrelated returns (correlation against equities is close to 0). The fund is engaged in a variety of capital structure trading, including short-term financing, and equity trading. The fund delivered 26% in 2020, resulting in 3rd place for the Event-Driven strategies.
Market Neutral
Market Neutral strategies exhibited mixed performance, primarily driven by weak performance for the systematic strategies where Factor-based strategies failed to deliver. However, Discretionary strategies generally did much better and that is where we found most of the winners for the category. Our Market Neutral index had a bad year and delivered -5% for 2020.
KLP Kapital is market neutral strategy primarily investing in Energy-related equities. The fund was launched in 2012 and had one of the strongest years on record in 2020, with a result of over 23%.
Aegon’s Equity Market Neutral strategy had a banner year and barely missed first place, as the fund return around 22% for the year. Most of the gains were generated in the last half of the year.
Zest’s Pairs Trading strategy is a classical market-neutral stock-picking fund seeking excess returns.
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