Canadian hedge funds are outperforming the market — while U.S. counterparts crash – FINANCIAL NEWS-ecozik.com
Home / Insurance Tips / Canadian hedge funds are outperforming the market — while U.S. counterparts crash

Canadian hedge funds are outperforming the market — while U.S. counterparts crash

The recently released figures for the Scotiabank Canadian Hedge Fund Index Asset Weighted index shows hedge funds returned an average of 6.21 per cent in 2015, while the broader S&P/TSX Composite Index posted fell 11.09 per cent during the same period.

Capricious markets have given only headaches to investors the world over, but one group of financial wizards makes important famous this volatility: Canadian hedge fund managers.

This country’s hedge funds happen to be strongly outperforming the broader market previously year. The increased volatility has been embraced by managers, a lot of whom see their strategies perform better when the market is less predictable.

The recently released figures for that Scotiabank Canadian Hedge Fund Index Asset Weighted index shows hedge funds returned an average of 6.21 per cent in 2015, while the broader S&P/TSX Composite Index posted fell 11.09 percent during the same period. 

Canadian hedge funds are smaller and more nimble

Canada’s success contrasts starkly with the situation in the United States, where a greater quantity of funds and more competition for investor cash, combined with weak returns, has resulted in a rash of closures. The HFRI Fund Weighted Composite index, which tracks hedge fund performance, closed down 0.85 percent in 2015, only the fourth time since 1990 the index recorded a loss. Since 2009, U.S. hedge funds have trailed the S&P 500’s performance each year by a typical 10 percentage points.

While it’s not easy to compare the 2 markets, given the different regulatory environments, fund managers say what is giving Canada an advantage now’s a far more boutique market.

“Canadian hedge funds are smaller and more nimble,” said Gary Ostoich, president of Spartan Fund Management Inc. in Toronto. There’s also less competition and more opportunities for managers to face out.

That isn’t to say Canada’s hedge fund industry is not without its challenges. The little size of the makes it difficult for smaller funds to obtain capital – especially since hedge fund investing is restricted to wealthy accredited investors, which will make up only one percent of people.

Related

About admin

Leave a Reply

Your email address will not be published. Required fields are marked *

*