Comparing returns to a benchmark isn’t always an important exercise for investors, but a fund significantly lagging an index is a red flag.
The Haidar Jupiter Fund lost 10.81 percent in October, expanding its loss for the year to 29.39 percent, according to the firm’s monthly email sent to clients and seen by Institutional Investor. That means through October Haidar trails the S&P 500 by about 50 percentage points, although this is not the macro hedge fund’s key performance benchmark.
This year’s drop comes after Haidar was down 43.4 percent in 2023. The hedge fund has now lost money in 14 of the past 22 months, many of them double-digit declines. The recent two-year collapse is also a remarkable reversal of fortune for Haidar, which in 2022 surged nearly 193 percent after generating strong double-digit gains in each of the previous three years.
Haidar Jupiter is led by Said Haidar. The fund is run aggressively, taking on a lot of leverage. It is not known what drove October’s loss.
Heading into the month, fixed income accounted for 38 percent of gross exposure, equities 24 percent, and commodities 18 percent, according to the firm’s September monthly report.
Over the first nine months of the year, fixed income made up 11.7 percent of Haidar’s gross loss. Commodities were responsible for 8.2 percent of the decline, according to the report. Foreign exchange and volatility trading accounted for small losses as well.
These were offset by equities, the only profitable strategy this year, which contributed nearly 6 percent to profits over the first nine months.
“With Treasuries and other global bonds having sold off sharply since the Fed’s first rate cut, it appears likely that a confluence of factors will continue to weigh on bond markets in the near term,” Haidar stated in its September client report. “These include the upcoming U.S. presidential election between two candidates with expansionary fiscal plans, higher debt issuance in France, Germany, and the U.K., and an uptick in U.S. and European economic data, which may slow the pace and magnitude of central bank rate cuts.”
Haidar is not the only macro hedge fund lagging the market this year.
BH Macro declined by 2.91 percent in October, cutting its gain for the year to a mere 11 basis points, according to a firm report. For the year through September, interest rates accounted for the bulk of the gains, followed by commodities and digital assets. Foreign exchange and, to a lesser extent, credit detracted from performance.
In contrast, Discovery Capital Management’s hedge fund is up 28.05 percent for the year after gaining 0.97 percent in October.