Hedge Funds Flourish, Managed Futures Battered In Feb.

Mar 16 2007 | 12:33pm ET

Thursday’s release of the Credit Suisse/Tremont Hedge Fund Index’s results for February confirmed the growing consensus: In spite of last month’s market roller-coaster, hedge funds did pretty well, unless, of course, you had the misfortune to be a managed futures fund.

The main CS/Tremont index rose 0.74% in February and has returned 2.08% this year, while its investable counterpart was essentially flat at 0.05% on the month (1.28% year-to-date). Both indices were driven by their event-driven components: The CS/Tremont Index’s event-driven category rose 1.55% last month (3.64% YTD) and the Investable Hedge Fund Index’s Sector Invest Event Driven category enjoyed a 1.36% boost (3.94% YTD). Multi-strategy event-driven and distressed funds did especially well, returning 1.81% (4.29% YTD) and 1.21% (2.94% YTD), respectively.

“Despite recent market malaise in the Chinese equity market, the subsequent spread to the worldwide equity markets at the end of February, and turbulence in the sub-prime mortgage loan market, the majority of hedge funds ended the month up,” Oliver Schupp, president of the Credit Suisse Index Co., said.

That majority did not include managed futures funds, which were pummeled in February. The main index’s managed futures category collapsed last month, dropping 4.38% to drag it’s year-to-date return into the red at -2.21%. The picture wasn’t any prettier for investable managed futures funds, which fell 4.25% in February and are down 2.7% on the year. Both were the second-strongest performers in their respective indices in January.


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