Emerging Markets Top Edhec, PerTrac Indexes in February

NICE, France (HedgeWorld.com)--With a return of 3.44%, emerging markets led the field in the Edhec Alternative Indexes for February.

The next-best-returning hedge fund category was long/short equity, returning 1.95%, followed by global macro at 1.83%, event driven at 1.54% and short selling at 1.51%. For the year to date through Feb. 28, short selling returned 5.44%, besting emerging markets' 4.93% return for the two months. In third place was long/short equity, with 1.78%.

All but one of the 13 strategies tracked by Edhec turned in positive numbers for February; convertible arbitrage posted a negative 0.59% performance. Rounding out the remainders: The fund of funds category returned 1.4%; distressed 1.32%; fixed-income arbitrage 0.91%; equity market neutral 0.86%; relative value 0.83%; merger arbitrage 0.61%; and CTA global 0.02%.

CTA global was down 4.36% for the year to date through February. Convertible arbitrage was the other negative performer for the year to date, with a minus 1.54% return.

According to Edhec, emerging markets were favored by a friendly stock market environment in February, especially for small cap stocks. Low levels of volatility over the month also helped the strategy.

The same positive conditions aided global macro funds, and Edhec officials noted that managers in that strategy did well despite less favorable movements in the bond market.

CTA managers struggled with low volatility and low bond returns. Against a backdrop of a steep rise in commodity prices, investors might have been expecting better, Edhec officials observed.

PerTrac Universes

Reporting from New York, the HedgeFund.net-PerTrac Universes index showed that hedge funds overall returned 1.7% in February, a performance topped by the S&P 500 Stock Index, which was up 1.89% for the month.

For the year to date through the end of February, hedge funds returned 1.37%, while the S&P was down 0.69%.

Like Edhec, the PerTrac index found emerging markets to be the top-performing strategy, with a return of 3.98%. Next was the "value" category, turning in 2.9%, and long/short equity at 2.23%.

As with the Edhec index, convertible arbitrage was in negative territory, with a return of negative 0.55%. Above it among the bottom performers was CTA/managed futures at 0.05%, and the technology sector at 0.37%.

Viewing performance by percentiles, PerTrac reported that the top 25% of hedge funds gained an average of 2.31%, while the bottom quarter returned 0.195 for February.

Contact Bob Keane with questions or comments at: bkeane@investmentadvisor.com.

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