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Which Mutual Funds and Hedge Funds with AUM > $100m, performed the best since the March 2020 Covid19?

This brief article examines the five best performing Hedge Funds and the five best performing Mutual Funds from April 2020 to December 2020. The sole focus was placed on hedge funds and mutual funds that have AUM > USD100m. We found that the ten best 2020 funds were all invested in either tech, growth stocks (not new) or small caps. In addition, we found that none of them made use of a leverage (using beta to the S&P500 as a proxy) higher than 40%.

The financial contraction caused by the shock of the COVID-19 pandemic affected the entire global economy, severely disrupting international supply chains, with the traditional retail and service sectors effectively having to deal with a total shutdown due to the prevailing unpredictability of governmental lockdown decrees.

Subsequently, there were dramatic losses in most sectors, quite notably in the equity market. However, the fund managers in the equity market that champion more reactive strategies were still able to make substantial profits by carefully monitoring market fluctuations and timing their trades opportunely throughout the numerous periods of extreme volatility that presented themselves across 2020.

Consequently, from April 2020 until the end of the year, the equity market actually went against expectation and grew substantially to 2020 end in an even stronger position, recovering from the losses incurred prior to that period.

Hedge funds with the highest cumulative return between April 2020 & December 2020

Strategy Cumulative Return (Apr-Dec 2020) Annualized Volatility Annual Sharpe Ratio (Rf= 0.25%) Max Drawdown Fund AUM (USD m)
CIF Cayman Fund SPC - Chaos Alpha Fund SP - USD Tech Growth Asia 419.16% 48.83% 1.99 -14.02% 227
Delphi Global Bottom-Up 279.72% 19.23% 0.98 -45.84% 184
Silver 8 Partners LP - USD 1 Technology Fintech 247.63% 59.99% 1.48 -67.00% 214
Seven Voyagers Capital Ltd Long Short Equities 207.54% 29.99% 0.68 -47.07% 135
JW Opportunities Fund LLC Long Short Equities 195.68% 34.01% 0.76 -52.09% 356

Source: Eurekahedge, Alternativesoft


The figures above show that from April 2020 to December 2020, CIF Cayman Fund SPC, was the best performer in terms of cumulative returns, with 419.16%.

A regression analysis was performed between these five hedge funds and the S&P500 which showed that their betas were all between 0.7 and 1.2, so not really taking advantage of leverage at all. This was then repeated but against the Russell 2000 Growth, where even lower betas 1 were found than against the S&P500. Consequently, no statistical bias towards growth stocks higher than the S&P500 were found.

For those who think that it might be the case that these 10 funds were lucky in 2020, the 2019 returns for nine of them were between 6.63% and 40.34%, with only JW Opportunities Fund LLC performing negatively (-21.54%).

Mutual Funds with the highest cumulative return between April 2020 & December 2020

Strategy Cumulative Return Apr-Dec 2020 Annualized Volatility Annual Sharpe Ratio (Rf= 0.25%) Max Drawdown Fund AUM (USD m)
Zevenbergen Genea Growth Technology Sector Equity 167.44% 30.42% 0.55 -86.67% 583
Morgan Stanley Inception US Equity Small Cap 162.57% 25.80% 0.56 -56.11% 1,157
Morgan Stanley Discovery US Equity Mid Cap 155.02% 20.84% 0.71 -56.22% 5,580
Baillie Gifford US Equity Growth US Equity Large Cap Growth 146.42% 17.33% 0.76 -47.56% 18,473
Driehaus Micro Cap Growth US Equity Small Cap 145.88% 30.51% 0.74 -55.08% 2,383

Source: Eurekahedge, Alternativesoft


Zevenbergen Genea Growth was the best performer amongst the mutual funds with a cumulative return of 167.44%. The fact that this technology sector equity strategy fund was the best performer amongst the mutual funds is suggestive of the general resilience shown by tech stocks throughout the pandemic. These five mutual funds have a beta to the S&P500 between 1.2 and 1.4.

From the data presented, the five of the hedge funds outperformed the five mutual funds during Apr2020-Dec2020. None of the funds in either the five best performing hedge funds or the five best performing mutual funds had more than 40% leverage (using beta to the S&P500 as a proxy for added simplicity), with the highest leverage being a mutual fund.



N.B. This article does not constitute any professional investment advice or recommendations to buy, sell, or hold any investments or investment products of any kind, and should be treated as more of an illustrative piece for educational purposes.


To trial a truly powerful and comprehensive analytic software for investment decisions, fund allocation, and our new, innovative digital due diligence visit alternativesoft.com , call us on +44 20 7510 2003, or email us information@alternativesoft.com


1 We use last five years monthly returns to compute the betas


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