Hedge funds lost on average 2.40 per cent in March, according to the Barclay Hedge Fund Index compiled by Fairfield, Iowa-based BarclayHedge, leaving the index down 4.42 per cent for the f
Hedge funds lost on average 2.40 per cent in March, according to the Barclay Hedge Fund Index compiled by Fairfield, Iowa-based BarclayHedge, leaving the index down 4.42 per cent for the first three months of the year.
Separately, New York-based adviser to hedge fund investors Hennessee Group reported that the Hennessee Hedge Fund Index had fallen by 1.9 per cent in March according to preliminary estimates, bringing the cumulative decline for the year so far to 3.5 per cent.
Hennessee notes that the S&P 500 declined 0.6 per cent in March and is down 9.9 for the first quarter, the Dow Jones Industrial Average was virtually flat for the month but down 7.6 per cent so far this year, and while the Nasdaq Composite Index rose by 0.3 per cent last month, it was down 14.1 per cent so far in 2008. The Lehman Aggregate Bond Index was also up 0.3 per cent in March and by 2.2 per cent for the quarter.
‘Following a strong recovery in February, hedge funds suffered another setback in March,’ says Sol Waksman, founder and president of BarclayHedge. ‘Fear of a collapse at Bear Stearns, followed by the euphoria of a Fed bailout, created large price swings in the equity markets, and made it a difficult trading month for both bulls and bears.’
Seventeen of Barclay’s 18 hedge fund indices declined last month. The Emerging Markets Index dropped 5.65 per cent, Multi-Strategy fell 3.45 per cent, Healthcare and Biotechnology lost 3.10 per cent, Event Driven was down 2.79 per cent, and Pacific Rim Equities lost 2.50 per cent.
‘Losses were widespread due to the volatile markets,’ Waksman says. ‘At this point, 78 percent of the hedge funds on our platform have reported a negative return for March.’ The BarclayHedge Fund of Funds Index was down 2.49 per cent in March.
The BarclayHedge Equity Short Bias Index was up 1.50 per cent in March, and has gained 12.44 per cent over the first quarter of the year. ‘The best-performing hedge fund strategy in 2008 has been shorting the market,’ Waksman says. ‘In fact, Equity Short Bias has had five straight months of gains and is up 21.90 per cent since November, an enviable return in these turbulent times.’
BarclayHedge, formerly known as the Barclay Group, was founded in 1985 and actively tracks more than 6,600 hedge funds, funds of hedge funds, and managed futures programmes for its 18 proprietary hedge fund indices and eight managed futures indices.
