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Hedge funds back in black as trend-following beats

Global hedge funds made a strong start to the year, registering performance-based gains of $21.5 billion in January, while trend following hedge funds that mostly rely on futures enjoyed stellar outperformance, amid oil price weakness.

Net asset outflows for the January stand at $3.2 billion, which was nearly twice the outflows compared to the same period last year, but this was more than compensated for by the strong performance-based gains, according to data from research provider Eurekahedge.

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"Hedge funds were off to a strong start in 2015, gaining 1.29 percent, outperforming underlying markets as the MSCI World Index fell 0.41 percent over concerns about a lack of global demand and Greece's debt problems," Eurekahedge's latest report, published Tuesday found.

"This atmosphere of uncertainty and central bank activity contributed to heightened market volatility, which picked up in the first trading month of the year. U.S. equities witnessed their largest loss since January 2014, underperforming global markets significantly," the report added.

Separate data from alternative assets data provider Preqin, also released Tuesday, showed Commodity Trading Advisors (CTAs), or a hedge funds that use futures to to achieve returns and tend to follow trends in markets using computers, posted their strongest monthly return since April 2011.

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CTAs returned 3.1 percent in January, building on solid returns seen last year, bringing 12-month rolling returns to 14.72 percent in the year to January 2015, Preqin said.

Oil price trends were consistent in late 2014, having collapsed in the second half of last year on oversupply, while the Organization of the Petroleum Exporting Countries refused to cut its output.

Brent has gained around 35 percent in the last month, currently trading at around $62 per barrel, having touched a six-year low of just over $45 in mid-January, down from $115 in June.