Research

Hedge Fund Performance Commentary

Introduction

The Eurekahedge Hedge Fund Index gained 1.06% in March1 , resulting in the strongest post-crisis Q1 return of 4.36%. Hedge fund managers recorded three consecutive months of positive performance, supported by strength in the global equity and bond markets as central banks shy away from tight monetary policies. Optimism over the progress of the US-China trade talks helped bolster the equity markets around the globe, counterbalancing concerns over economic growth slowdown. Hedge fund managers focusing on Asia ex-Japan gained 2.04% over the month, outperforming their North American peers who returned 0.71%. On the other hand, European fund managers were down 0.23% as Brexit uncertainties and growth concerns continued to weigh on the region’s equity markets. The Eurekahedge Greater China Hedge Fund Index was up 12.27% year-to-date as the country’s onshore equity markets recovered from the devastating losses suffered in 2018. Despite that, China’s growth is expected to remain under pressure, potentially necessitating further policy support from the PBOC throughout the year.

Approximately 64.3% of the hedge fund managers tracked by Eurekahedge posted positive returns in March, and 16.3% of them managed to generate double-digit gains year-to-date. Managers utilising CTA/managed futures strategies were up 2.66% in March, with the underlying trend following sub-strategy up 5.05% during the month. Long/short equities hedge funds gained 0.53%, trailing behind the global equity market as represented by the MSCI AC World IMI (Local), which was up 1.09% in March.

Figure 1: March 2019 and February 2019 returns across regions
 

Looking at year-to-date returns, Asia ex-Japan and North America mandates posted the strongest returns on the back of the respective regions’ equity market performance. The two mandates were up 7.21% and 5.55% respectively as of March 2019. Meanwhile, European funds lagged behind with 2.42% gain year-to-date.

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Footnote
1Based on 42.83% of funds which have reported March 2019 returns as at 11 April 2019  

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