Ken Griffin, Founder and CEO, Citadel
Mike Blake | Reuters
Billionaire investor Ken Griffin’s hedge funds shattered the market in January as a rise in volatility and a steep sell-off of growth stocks created an ideal environment for fast-money traders.
Citadel’s multistrategy flagship fund Wellington rose 4.71% last month, according to a person familiar with the returns.
Citadel’s global fixed income fund performed even better with a return of 4.91%, while its equity fund rose 0.89% and its tactical trading strategy rose 1.79% last month, according to the source.
The company’s outstanding performance came as wild price fluctuations gripped Wall Street with the Federal Reserve’s high-profile policy hub in focus. The S&P 500 fell more than 5% for its worst month since March 2020, while the technology-heavy Nasdaq Composite plunged into the correction territory or fell more than 10% from its record high.
In fact, the hedge fund industry as a whole did well in the volatile January. All major hedge fund categories outperformed the overall market last month, with funds least correlated with the market that delivered the strongest returns, according to Bank of America data.
In early 2022, rising bond yields triggered hedge funds to sell growth-focused technology stocks at a rate not seen in the past decade, according to Goldman Sachs’ prime brokerage data.
Tech stocks are seen as sensitive to rising interest rates because increased debt costs can hamper their growth and may make their future cash flows look less valuable.