Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Alternative Investments > Hedge Funds

Hedge Funds’ Q1 Return Extends Run of Positive Performance

Your article was successfully shared with the contacts you provided.

Hedge funds concluded a first quarter that saw gains in all three months, extending a stretch of positive performance in which industry returns rose for 12 of the last 13 months, Hedge Fund Research reported Friday.

The HFRI Fund Weighted Composite Index advanced 0.2% in March, topping the performance of both the S&P 500 and DJIA, and bringing year-to-date performance to 2.3%.

“Hedge funds gained in March as the Federal Reserve proceeded with a widely anticipated interest rate increase concurrent with a weakening of the Trump trade, and as U.S. equities concluded a strong first quarter with mixed performance in March,” HFR president Kenneth Heinz said in a statement.

The HFRI index finished 2016 up 5.6%, raising its value to a record 12,966. The March gain extended the index value to 13,252, the fourth consecutive monthly record.

Equity hedge led all strategies in March, up 0.6% and up 3.6% for the year to date, as U.S. equities recorded mixed performance.

HFR reported that the technology, fundamental growth and health care substrategies contributed to the March return, up 2.7%, 1.2% and 1.1%, respectively, while the short bias substrategy lost 1.5%.

Fixed income-based relative value arbitrage strategies also turned up winners in March for the 13th consecutive month, despite the Fed’s rate hike, up 0.5% and up 2.5% for the year.

Volatility substrategies advanced 2.1%, and credit multistrategy funds gained 0.3%.

Event-driven, the top performer in 2016, was flat in March, bringing year-to-date performance to 2.2%. Gains of 0.4% and 0.3% by merger arbitrage and special situations were offset by distressed funds’ 0.9% decline.

Macro fell 0.5% in March, and is down 0.2% for the year. Currencies led substrategies, up 2.7%, while commodity trading advsors lost 1.4% and commodity funds 0.4%.

“In a similar manner to the 2016 intra-year market cycles that were driven by Brexit and the U.S. election, 2017 financial market performance is likely to be driven by similar intra-year cycles, including upcoming European elections,” Heinz said.

These will contribute to and create opportunities for hedged long/short strategies across different asset classes, he said. “Funds positioned for this environment are likely to lead industry growth and performance in 2017.”

— Check out Madoff Deals Locked in Safe at Center of U.K. Hedge-Fund Lawsuit on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.