Hedge funds playing to certain market approaches were able to deliver solid financial returns in February, industry figures show.

Hedge funds that track broad movements in currencies, interest rates and other yardsticks of macroeconomic trends led industry-wide gains in February, demonstrating an ability to tap into the sharp moves caused by Russia’s invasion of Ukraine.

The HFRI 500 Macro Index surged 2.9 per cent in February, extending the 2022 gain to 4.75 per cent, with strong contributions from commodity, fundamental discretionary and quantitative, trend-following strategies, according to Hedge Fund Research, the Chicago-based firm tracking the sector. The investible HFRI 500 Fund Weighted Composite Index advanced by 1.2 per cent for the month, topping the decline of the Nasdaq by 470 basis points

The performance dispersion of the underlying HFRI index constituents narrowed in February, with the top decile of the HFRI gaining an average of 9.0 per cent, while the bottom decile fell by an average of 5.8 per cent for the month, representing a top-bottom dispersion of 14.8 per cent.

“February was driven by the spike in commodity prices and declining equities in response the invasion of Ukraine, while January performance was driven by rising commodity prices, falling equities, and rising interest rates as a result of generational inflationary pressures,” Kenneth J Heinz, president of HFR, said.

Event-driven strategies, which often focus on out-of-favor, deep value equity exposures and speculation on M&A situations, also advanced in February and were led by distressed and merger arbitrage strategies. The investible HFRI 500 Event-Driven Index gained 0.5 per cent.

Equity hedge funds, which invest long and short across specialized sub-strategies, also posted a gain for the month, with the investible HFRI 500 Equity Hedge Index advancing 0.5 per cent, topping the decline of the Nasdaq Composite Index by 400 basis points.