With a number of hedge-fund strategies now completely out of fashion, there’s a sizable gap between a few high-flying fund managers with approaches that fit this market, and laggards who stuck with styles that worked well in recent years. The latter, who used out-of-favour investment strategies such as arbitrage or growth, turned in poor results. At the other extreme, several funds that invest in still-strong sectors such as credit are enjoying banner years.
Scotiabank’s alternative mutual-fund index had positive results in each of the past three years, including an 8.93-per-cent rise in 2021. The top performer through the end of May was NorthStream Credit Strategies Fund, up by 15.6 per cent. The worst results came from the Venator Select Fund, which was down by 42.2 per cent. Venator subsequently released its results for June: The fund was down 22.8 per cent in the month and has declined by 55.4 per cent during the first half of this year.
To big to fail again?