The Scotia Capital Canadian Hedge Fund Performance Index finished March 2010 up 1.78 per cent on an asset weighted basis and up 1.33 per cent on an equal weighted basis.
The index underperformed major global equities and broader hedge fund indices on both an asset and equal weighted basis.
Global capital markets rallied strongly in March as appetite for risky assets increased against a decline in volatility. The trading environment was influenced by the key themes of positive corporate earnings, stabilizing fundamental economic data, and speculation that the European Union and the International Monetary Fund would collaborate on an aid package for debt laden Greece.
In the US, the S&P500 closed up 5.88 per cent. All sectors gained, led by industrials, financials and consumer discretionary. The healthcare sector lagged somewhat in light of new US legislation designed to effect reform.
In Canada, another month of broad-based gains across all ten sectors led the TSX to advance 3.51 per cent. Close on the heels of healthcare and industrials, Canadian financials were noteworthy gainers on the month, as the big five Canadian banks all reported better than expected Q1 results.
On the commodities front, oil gained 5.15 per cent as market participants expressed increasing conviction in a strengthening global economy.
In FX, the USD further depreciated against the CAD, while reversing its gain to a slight decline versus the EUR and GBP, and appreciated strongly versus the JPY.
The March trading environment proved to be favourable for the majority of Canadian hedge fund managers. Canadian managers’ positive performance once again lagged results in broader capital markets as an ongoing effect of low net aggregate exposures.
The aim of the Scotia Capital Canadian Hedge Fund Performance Index is to provide an overview of the Canadian hedge fund universe.
