Hedge funds’ February rebound has proven short-lived.
Most hedge fund strategies suffered losses in the first half of March, with the average hedge fund dropping 0.48% through March 17, according to Hedge Fund Research. The decline leaves the HFRX Global Hedge Fund Index up 0.86% through the first 10 weeks of the year. By contrast, the Standard & Poor’s 500 Index is up for both the month and the year.
Emerging markets funds were hit the hardest, likely due to concerns about the Russo-Ukrainian conflict in the Crimea. The HFRX Emerging Markets Composite Index fell 1.49% in the first half of March and is down 1.56% on the year. Systematic diversified commodity trading advisers also suffered, dropped 1.39% (down 2.6% year-to-date).
Macro funds and CTAs shed 0.8% in the first two weeks of the month (up 0.66% YTD), convertible arbitrage funds 0.76% (up 1.38% YTD), fundamental growth funds 0.63% (3.88% YTD), special situations funds 0.53% (2.62% YTD), relative value arbitrage funds 0.46% (up 0.66% YTD), equity hedge funds 0.39% (up 1.23% YTD), multi-strategy funds 0.39% (up 0.5% YTD), event-driven funds 0.35% (up 2.59% YTD), fundamental value funds 0.32% (up 0.14% YTD), credit funds 0.18% (up 1.79% YTD), equity market neutral funds 0.13% (up 1.32% YTD) and North America funds 0.04% (up 1.01% YTD).
Master-limited partnerships remained the best-performing strategy of early 2014, rising 1.76% through March 17 (4.63% YTD). Distressed restructuring funds added 0.14% on the month (2.83% YTD), merger arbitrage funds 0.04% (0.2% YTD) and multi-region funds 0.02% (2.42% YTD).