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In February, global financial markets posted mixed performance as managers and investors adjusted their positions in anticipation of the impact from upcoming international trade tariffs. US equities experienced a decline, driven largely by a sharp drop in large-cap technology stocks, while most European and Asian indices posted gains for the month. Interest rates declined as investors prepared for the potential economic effects of the tariffs and the possibility of slower growth in 2025. Cryptocurrencies saw significant declines, and the US Dollar weakened against most other currencies. Commodities showed mixed results, with natural gas continuing its record surge and gold posting gains. However, oil, platinum, and most agricultural commodities declined.

Hedge Funds gained led by Relative Value and Macro strategies, with the HFRX Global Hedge Fund Index gaining +0.28%.

HFRX Relative Value Arbitrage Index gained +0.75% for the month from gains in convertible arbitrage strategies and multi-strategy managers. The HFRX RV: Multi-Strategy Index gained +0.80% as interest rates declined in February. The HFRX Convertible Arbitrage Index gained +0.15% as volatility rose.

HFRX Macro/CTA Index gained +0.70% in February from gains in exposure to opportunistic fixed-income and global multi-asset strategies offset by declines in systematic trend-following managers. The HFRX Macro Systematic/CTA Index declined -0.50% as the US Dollar declined against most currencies. Natural gas, copper, and gold led commodity gains while cocoa, platinum, and oil led commodity declines.

HFRX Event Driven Index gained +0.46% for the month from gains in merger arbitrage strategies and special situations managers. The HFRX Merger Arbitrage Index gained +0.74% as global equity markets saw mixed performance in February. The HFRX Special Situations Index gained +0.44% from gains in exposure to global, catalyst-driven fundamental value equities.

HFRX Equity Hedge Index declined -0.53% from gains in market neutral & fundamental value strategies offset by declines in fundamental growth strategies. The HFRX Fundamental Value Index gained +0.55% from gains concentrated in large-cap US & European equities. The HFRX Market Neutral Index gained +0.33% from gains in mean reverting, factor-based strategies. The HFRX Fundamental Growth Index declined -2.69% from declines in exposure to small-cap US & European equities.

Comments reference performance figures as of February 28, 2025