The Eurekahedge Hedge Fund Index rose 1.3% in March, with 61% of funds finishing the month positive, on the back of sharp reversals in the underlying markets.
Redemptions eased further in March, amounting to USD7billion (net) or 0.5% of the universe. This is based on the data of 30% of the reporting funds. In addition, 96% of all reporting funds have outperformed the MSCI World Index (-12.5%) over quarter one 2009.
All geographical investment mandates finished the month in positive territory, with Eastern Europe and Russia up 14.4% on average. Eurekahedge says while this can be partly attributed to the sharp upturn in regional equities (MSIC Eastern Europe rose 19.1% in March), it was a handful of funds with returns between 16% and 38% which positively skewed the average.
Their returns also positively impacted the broader Eurekahedge European Hedge Fund Index, which gained 2.3% during the month.
Asian managers had a healthy month too, partly due to strongly rallying regional equities; the MSCI Asia Pacific ex-Japan Index rose 14.5% in March.
Japanese managers, however, recorded relatively modest gains averaging 0.3%, as a number of them failed to benefit from the sudden bounce in the domestic equity market.
North American and Latin American managers were up 1.4% and one per cent respectively, with mixed returns across managers in both regions; on the whole, equity plays proved rewarding while commodity allocations resulted in losses, during the month.
Most strategic mandates, with the notable exception of CTAs, gave positive returns in March. CTAs were down two per cent on average, with the strategy recording the largest range of returns (-26% to 34%). Upward movement in the commodity market, despite some volatility, worked in favour of some managers, while the majority of them who were wrongly positioned, turned in losses.
On the other hand, fixed income and long/short equity managers had a strong month, both returning 2.5% on average. While the latter made most of their gains from long positions in equities (MSCI World Index rose 7.2% during the month, owing to action from policy makers and news of profitability across major banks), the former benefited from a decrease in government bond yields, among other things.
The Eurekahedge Relative Value Hedge Fund Index rose 4.3% during the month, with equity-focused managers turning in impressive gains, thereby raising the strategy’s average return.
L.D.