Opalesque Solutions

'Alternative Alternatives' investment funds gained 0.63% in December (+2.92% in 2012)

January 31, 2013

'Alternatives Alternatives' investment funds had a positive month of December, according to an estimation based on 633 single- and multi-manager funds currently listed in 25 categories in the Opalesque Solutions A SQUARE Fund Database (Source).

The Opalesque A SQUARE Index gained* 0.63% last month, bringing its 2012 return to +2.92%. Estimates for November and October were corrected to -0.09% and -1.07%, respectively. The A SQUARE Funds of Funds Index lost 0.25% in December and 1.81% in 2012.

- Environmental investment strategies performed best in December with an average gain of 5.66%. Credit (+2.19%) and structural finance (+1.45%) strategies posted solid returns, as well as funds investing in energy (+1.66%), collectibles (+1.48%), insurance-linked securities (+1.27%) and real estate (+1.26%).

- Most commodity-focused strategies saw losses, led by base & precious metals (-2.86%) and agriculture (-2.69%) traders. All-commodity strategies lost 0.14%.

- In 2012, the best performing asset classes were agriculture (+14.6%), as well as real estate (+15.0%), infrastructure (+11.9%), structured finance (+14.5%) and credit (+11.37%). Negative results were posted by base & precious metals (-13.4%), all-commodity (-2.6%) and energy strategies (-0.68%).

A SQUARE database weighting by asset classes

Investment funds specializing in alternative asset classes underperformed both global hedge funds and the stock market for the second consecutive year: The Eurekahedge Hedge Fund Index gained 6.18% in 2012, and the MSCI World Index was up over 13%.

Equity market correlation of A SQUARE Index funds was 59%, compared to 80% for the Eurekahedge Hedge Fund Index. A SQUARE funds returns was more volatile though, resulting in equity market betas of 20% for the A SQUARE Index and 24% for the Eurekahedge Hedge Fund Index.

- Florian Guldner, Opalesque Research

* Estimated numbers of the last 3 months are based on a calculation conducted on the 27th of the actual month. Earlier results are locked.