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Hedge funds up 1 per cent in March, says Eurekahedge

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The Eurekahedge Hedge Fund Index gained 1.00 per cent in March, supported by strength in global equity and bond markets as central banks shy away from tight monetary policies. 

Optimism over the progress of the US-China trade talk supported both countries’ equities over the first quarter of the year. The Eurekahedge Greater China Hedge Fund Index was up 11.46 per cent year-to-date as the country’s onshore equity markets recovered from the devastating losses in 2018. China A-shares also benefited from MSCI’s announcement to increase their weight in the emerging market indices this year. 

Hedge fund managers focusing on Japan and Europe were up 2.56 per cent and 2.35 per cent year-to-date respectively, lagging behind their peers with North America and Asia ex-Japan mandates. On the other hand, global growth slowdown persisted as a headwind for hedge fund managers, with major central banks cutting their growth forecast for 2019. China’s growth is expected to remain under pressure, potentially necessitating further policy support from the PBOC throughout the year.

Roughly 65.5 per cent of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in March. Fund managers utilising equity long-biased strategies maintained their place at the top with their 8.81 per cent gain over the first quarter, while on the other end of the spectrum long volatility strategic mandate was down 6.26 per cent year-to-date as market volatilities remained suppressed throughout the year.

North American fund managers were up 5.15 per cent as of March year-to-date, recovering from the losses they suffered over the last quarter of 2018. The cautious tone of the Fed and anticipation over the US-China trade talk helped equity markets gain during the month. On the other hand, the Eurekahedge European Hedge Fund Index declined 0.30 per cent during the month, despite the positive performance of the region’s equity markets. Asia ex-Japan mandate continued to rebound in March, with the Eurekahedge Asia ex Japan Hedge Fund Index up 1.42 per cent during the month.

Returns were mixed across strategic mandates in March. CTA/managed futures hedge funds outperformed most of their peers by returning 2.65 per cent over the month, owing to the strong energy sector during the month. Multi-strategy fund managers benefited from the upward movement in the equity and bond markets in March, which saw the mandate gaining 1.03 per cent. On a year-to-date basis, equity long-biased strategies continued to outperform, returning 8.81 per cent over the first quarter of 2019.

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