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April 18, 2007
Hedge funds beat S&P 500
Hedge funds outperformed the S&P 500 in the first three months of this year with average returns of 2.1% at a time when the industry has seen record investment in the sector.
Emerging markets funds led the charge with 5.5% in average returns with China at the top of the list. Convertible arbitrage funds, which benefited from increased volatility in the sector, also fared well with 4.67% average returns, according to Morningstar.
Although financial sector funds were undermined by poor sub-prime performance, hedge funds in the distressed company category saw 4.1% in average returns. The research was based on performance of 6,000 hedge funds and hedge fund of funds in 15 categories in Morningstar’s database.
Among the losers in hedge fund performance were funds in the managed futures category which lost 2% in the first quarter. Poor performers also included equity net neutral funds with 1.5% in average returns and global macro funds, a category that includes currency traders, which suffered from financing higher yield assets with lower yield currencies.
The returns this year built on the growth of hedge fund performance in the same period last year, when The Credit Suisse/Tremont Hedge Fund Index rose 5.46% in the first three months of 2006. That was the index’s best year since 2004.
-Financial News-
Posted by su at April 18, 2007 4:45 PM