Hedge funds gained 1.86% in March, according to the Barclay Hedge Fund Index.
Despite recent prognostications of the demise of hedge funds, 2006 has gotten off to the best start since Q1 of 2000, when the Barclay Hedge Fund Index gained 9.65%, says Sol Waksman, founder and president of The Barclay Group.
Six years ago, both the DJIA and the tech-heavy NASDAQ reached all-time highs. Then, as now, hedge fund returns were given a boost by rising equity markets.
Barclays Emerging Markets Index continued its strong performance, up 9.99% in the first quarter of 2006, with emerging markets gaining 22.15% in 2005.
Right now, emerging Markets is the best performing hedge fund sector, gaining close to 108 percent during the past three years, says Waksman. This demand-driven rally has been fueled by yield-hungry fixed income investors and value equity investors.
Overall, 17 of Barclays 18 hedge fund indexes showed gains in March. Barclays equity long bias index rose 2.74%, Technology was up 2.68, event driven gained 2.58%, and European equities gained 2.31%. Only equity short bias lost ground, down 1.79% in March.