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Hedge Funds Rise 0.5% in February: MSCI

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NEW YORK (–February was a so-so month for hedge funds tracked by Morgan Stanley Capital International, according to preliminary data with 61% of funds reporting.

The MSCI Hedge Fund Composite Index returned 0.5% in February and was up 1.9% year-to-date. In the same periods, the Standard & Poor’s 500 stock index returned negative 1.5% and negative 4.4%, respectively. The MSCI World Equity Index fell 1.9% in February and dropped 5% in January and February. The MSCI Sovereign Debt Index returned 1.4% in February and 2.9% year-to-date through February.

Among MSCI’s five hedge fund process groups, the MSCI Directional Trading Index–futures funds and global macro funds–turned in the best performance in February, with a return of 2.9%, bringing its year-to-date return through February to 6.3%. MSCI revised its January return for the category to 3.3% from 3.7%.

The MSCI Specialist Credit Index returned a healthy 1% in February and 3.2% in the first two months of the year. That group’s January return was revised upward to 2.2% from 1.3%. The Specialist Credit Index is made up of funds that are primarily fixed-income securities.

Funds in the MSCI Relative Value Index returned 0.7% in February, resulting in a preliminary year-to-date return of 2.2%. MSCI revised the index up to 1.5% in January from a preliminary number of 1.2%. Funds in the relative value category use arbitrage strategies.

The Multi-Process Index, for funds that regularly use more than one strategy, returned 0.2% in February and 1.1% in January and February. January’s return was revised slightly to 1% from 0.9%.

Pulling up the rear was the MSCI Security Selection Index, which contains the most popular type of hedge fund, long/short equity funds, as well as market neutral and short-focused funds. In February, the Security Selection Index returned negative 0.6%, and in the first two months of the year returned negative 0.3%. The grouping also was revised slightly with its final January numbers, falling to 0.3% from 0.4%.

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