Hedge Funds Beat S&P 500 In First Quarter

Apr 14 2014 | 3:11am ET

The Hennessee Hedge Fund Index lost 0.48% in March, however year-to-date the index is up 1.5%, beating the S&P 500 which gained 1.3% over the same period. Meanwhile, the Dow Jones Industrial Average rose +0.83% in March (-0.72% YTD), and the NASDAQ Composite Index declined 2.53% during the month (+0.54% YTD).  Bonds were negative on the month, as the Barclays Aggregate Bond Index decreased 0.17% (+1.84% YTD).

“Momentum names in the NASDAQ were hit hard in March, reducing hedge fund performance as the reduction of fed bond purchases increased concerns that the 10-Year was heading above 3%,” said Charles Gradante, co-founder of Hennessee Group.

According to the index, the top three strategies for the month of March were Latin America, which gained 3.51%, high yield, which rose 1.36%, and convertible arbitrage, which was up 1.15%.

The worst performing strategies for the month were technology, which lost 2.74%, international, which was down 2.03%, and macro, which dropped 1.44%.

"Risk assets were mostly higher even as volatility, measured by the VIX, increased from February’s month end value of 14 to an intra-month high over 17.5.” added Gradante.  "Hedge fund managers had a difficult time weathering the back and forth direction of the market during March.”

Equity long/short hedge funds were negative in March, as the Hennessee Long/Short Equity Index dipped 0.3% (+2.59% YTD).  The best performing sectors were telecommunication services (4.67%), utilities (3.09%), and financials (3.08%), while underperforming sectors were consumer discretionary (-2.93%), health care (-1.37%) and information technology (+0.21%).  The utilities sector is now the best performing sector for the year having gained 9.02% YTD through March, while consumer discretionary is bringing up the rear, having lost 3.16% YTD through March.

“Managers are not changing their net long bias as there is no competition for equities and stock buybacks continue reducing supply,” said Gradante. “However, hedge fund managers reduced exposures to high beta stocks in March.”


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR