Key Takeaways
- • The Scotiabank Canadian Hedge Fund Index delivered a +10.6% return on an asset-weighted basis for the full year 2020, reflecting strong performance across Canadian-domiciled hedge funds.
- • The index tracks both open and closed funds with a minimum AUM of C$15 million and a 12-month track record, providing a comprehensive benchmark for the Canadian hedge fund universe.
- • Scotiabank publishes dual calculation methodologies—equal-weighted and asset-weighted—enabling investors to assess performance across different weighting schemes and fund size distributions.
- • The index serves as a primary performance tracking tool for institutional investors and hedge fund managers monitoring Canadian alternative investment activity and returns.
Summary
The Scotiabank Canadian Hedge Fund Index concluded 2020 with a +10.6% return on an asset-weighted basis, demonstrating solid performance for Canadian-domiciled hedge funds during a year marked by significant market volatility and recovery. The asset-weighted calculation method weights returns according to fund size, providing investors with a measure of performance that reflects how capital is actually distributed across the Canadian hedge fund landscape.
The index encompasses both open and closed hedge funds meeting specific eligibility criteria: a minimum assets under management (AUM) of C$15 million and a demonstrated 12-month track record. This construction ensures the benchmark captures a representative cross-section of the actively managed Canadian hedge fund industry while maintaining data quality standards through minimum fund size and operating history thresholds.
Scotiabank's publication of the Canadian Hedge Fund Index offers institutional investors and alternative investment professionals two distinct performance perspectives: an asset-weighted calculation and an equal-weighted calculation. The asset-weighted methodology, which produced the +10.6% return for 2020, reflects the aggregated performance of capital-weighted fund returns and is particularly relevant for investors seeking to understand market-cap-adjusted performance. This dual-calculation approach enables sophisticated investors to evaluate whether performance divergence between methodologies indicates consolidation among larger funds or outperformance concentration within specific fund size cohorts.
The 2020 result indicates Canadian hedge funds broadly recovered from early-year pandemic-induced volatility and capitalized on market recovery dynamics throughout the remainder of the year. As a published benchmark for the Canadian hedge fund industry, the Scotiabank index provides prime services infrastructure for performance attribution analysis and competitive positioning assessment within the alternative investment community.
The index encompasses both open and closed hedge funds meeting specific eligibility criteria: a minimum assets under management (AUM) of C$15 million and a demonstrated 12-month track record. This construction ensures the benchmark captures a representative cross-section of the actively managed Canadian hedge fund industry while maintaining data quality standards through minimum fund size and operating history thresholds.
Scotiabank's publication of the Canadian Hedge Fund Index offers institutional investors and alternative investment professionals two distinct performance perspectives: an asset-weighted calculation and an equal-weighted calculation. The asset-weighted methodology, which produced the +10.6% return for 2020, reflects the aggregated performance of capital-weighted fund returns and is particularly relevant for investors seeking to understand market-cap-adjusted performance. This dual-calculation approach enables sophisticated investors to evaluate whether performance divergence between methodologies indicates consolidation among larger funds or outperformance concentration within specific fund size cohorts.
The 2020 result indicates Canadian hedge funds broadly recovered from early-year pandemic-induced volatility and capitalized on market recovery dynamics throughout the remainder of the year. As a published benchmark for the Canadian hedge fund industry, the Scotiabank index provides prime services infrastructure for performance attribution analysis and competitive positioning assessment within the alternative investment community.
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