Hedge Funds Post Best Q1 Since 2006

Apr 10 2012 | 8:44am ET

Equity and event driven funds led the way as hedge funds posted their strongest first quarter since 2006, according to Hedge Fund Research.

The HFRI Fund Weighted Composite Index was up 4.94% in Q1 2012, despite a slight loss—0.01%—in March.

For the full quarter, equity hedge funds posted the strongest gains, adding 7.3%, their best first quarter performance since 2000. For the month of March alone, equity hedge strategies were up 0.3%.

Relative value arbitrage funds were up 0.60% for the month of March (the best results of any strategy) for a first quarter gain of 4.3%.

Event driven funds gained 4.5% in the first quarter and 0.2% for March.

On the flip side of the coin, Macro funds declined by 0.92% in March, although they were up 1.2% for the quarter. Within the macro category, systematic diversified funds were down 1.96% for March and 0.68% for the first quarter.

Funds of hedge funds gained 3.4% in the first quarter, having added 0.06% in March. Emerging markets added 7.35% in the first quarter despite a decline of 1.5% in March.

"Hedge fund gains from early 2012 were virtually unchanged in March, with overall Q1 performance the best in six   years," said Kenneth J. Heinz, president of HFR, in a statement. "While many global equity   markets rallied in early Q112, volatility has returned to equities and other  asset classes in recent weeks, indicating that although the set of risks has  shifted in 2012, navigating the nascent global growth environment requires   tactical flexibility and positioning for a broad continuum of macroeconomic and   fundamental financial market scenarios."

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