Down-market hedge funds feast on 2020 markets
Tail-risk and long-volatility hedge fund strategies jumped out to strong 2020 starts after years of trailing their peer fund classes. Tail-risk strategies, or those poised to specifically profit on market corrections, were up 13.4% through the end of February. The strategy group was at or near the bottom of EurekaHedge's strategies in annual returns since at least 2012. Long-volatility funds, those which bet on rises in implied market volatility, gained 12.4% over the first two months of the year. Like their tail-risk peers, this fund group has also been out of favor for much of the last eight years.
Among fixed-income-focused funds, only distressed debt funds saw much success amid falling interest rates.