Unlimited Hedge Fund Barometer: Emerging Markets Funds Dominated in Q3 as China Stocks Rally

Managed Futures Funds’ Performance Underwhelmed in the Third Quarter

NEW YORK, Oct. 17, 2024 (GLOBE NEWSWIRE) — Unlimited, an investment firm and ETF sponsor that uses proprietary technology to provide low-cost alternative strategies to a variety of investors, published its Q3 2024 Hedge Fund Barometer today, showing emerging markets hedge funds leading their peers with an average 5% gross return in the quarter. Global macro and managed futures funds saw the weakest performance in the quarter at -1.2%.

According to Unlimited’s latest Barometer, aggregate hedge fund performance was moderately positive across most strategies in Q3 2024. To read the full report, click here.

Unlimited’s Barometer uses machine learning and multiple data sources to track performance for the major hedge fund strategies. It also provides a near real-time view into how hedge funds are positioned across major asset classes, industry sectors and geographies.

Unlike Q2 where equity long/short funds outperformed other hedge fund strategies, emerging markets managers had the strongest performance in Q3 and long/short equity and event driven managers rode through the summer turmoil to deliver positive returns. Hedge funds generally have also reduced their exposure to Japanese equities, which performed strongly in Q1.

“One of the more acute market moves in the quarter came in onshore and offshore Chinese equities,” said Bob Elliott, CEO and CIO of Unlimited. “While managers appear to have trimmed underweights from earlier in the year, as those stocks sold off, their position remained more neutral despite the recent market action.”

Unlimited Hedge Fund Barometer Q3 2024 Findings

Despite a turbulent August, long/short equity managers continue to hold roughly normal levels of overall equity exposure while continuing their rotation toward large cap growth stocks and away from small and mid-caps. Fixed income managers have started to trim their near peak exposure to corporate spreads after their approach of levering up into secularly low spreads backfired in August as spreads rose. Other highlights include:

• Average gross returns across strategies were just below +3.5%
• The best performing fund style was Emerging Markets equity at +5%
• The worst performing fund style was Managed Futures at -1.2%

As we enter the last quarter of 2024, Unlimited’s Barometer also shows hedge funds:

• Were modestly overweight equities – specifically growth stocks – following a period of being underweight stocks in ‘22-’23. They also remained underweight small and mid-cap stocks.
• Were roughly neutral on the U.S. dollar relative to other currencies, as Fed policy has shifted to a more dovish stance over the last several months. On the British pound, short positions were closed in recent months. They were modestly long the yen.
• Remained relatively neutral bonds, weighing the risks between reacceleration and recession. Earlier in the quarter Fixed Income managers held near historical peak levels while spread levels approached all-time lows, a strategy that backfired in August. Subsequently, managers appear to have reduced risks in credit spreads.
• Have reduced positions in energy commodities as prices have fallen. Positions in other growth-oriented commodities like metals have remained roughly neutral in recent months.

Click here to view a video on how Unlimited’s technology works.

About Unlimited
Founded in 2022 by Bob Elliott, Bruce McNevin and Matt Salzberg, Unlimited is an investment firm using proprietary technology to create strategies that offer lower-cost access to 2 & 20 style alternative investment strategies, such as hedge funds, to a wide variety of investors. Mr. Elliott has built innovative hedge fund strategies for more than two decades, including at Bridgewater Associates, the world’s largest hedge fund. Mr. McNevin is a Professor of Economics at New York University and has held various data science positions at hedge funds Clinton Group and Midway Group, along with positions at Bank of America and BlackRock. Mr. Salzberg serves as a Managing Partner at Material and Board Director of Unlimited. Learn more at unlimitedfunds.com.

Media Contacts:

Sarah Lazarus	Zach Kouwe
Dukas Linden Public Relations	Dukas Linden Public Relations
+1 617-335-7823	+1 551-655-4032
sarah@dlpr.com	zkouwe@dlpr.com

For informational and educational purposes only and should not be construed as investment advice. The data shown herein represents past performance and should not be construed as providing any assurance or guarantee as to returns that may be realized in the future. No representation is being made that any investment will or is likely to achieve profits or losses similar to those shown herein. No investment strategy or risk management technique can guarantee return or eliminate risk in any market environment.