Eurekahedge reports that hedge funds registered their second consecutive month of losses since the start of 2018, with the Eurekahedge Hedge Fund Index declining 0.51 per cent in March, while still outperforming the MSCI World Index which ended the month down 2.21 per cent.
The firm writes that the average return of global hedge funds was pulled into negative territory in March as choppy trading conditions across commodities, and weaker global equity performance continued to affect the trading scene.
March was marked by investors’ concerns over the US and China trade war which made headlines throughout the month and negatively affected the global equity markets, most of which ended the month in the red. As of Q1 2018, hedge funds are down 0.10 per cent ahead of underlying markets as the MSCI World Index posted losses of 2.24 per cent.
Close to 56 per cent of managers were in positive territory and roughly 5 per cent posted year-to-date returns in excess of 10 per cent over the first quarter. Latin American managers led among regional mandates this month with their 4.30 per cent gain, while relative value managers topped the table across strategies, gaining 2.92 per cent over the month.
Looking at year-to-date performance, Latin American managers outshone their peers from other regions with gains of 5.21 per cent. Meanwhile, distressed debt hedge fund managers posted the best Q1 2018 performance among all strategies based on preliminary numbers, gaining 2.02 per cent over the quarter, followed by relative value managers who generated gains of 1.01 per cent.
March saw Asian hedge funds continuing their slide with Asia ex-Japan mandates down 1.79 per cent during the month with losses among India and China dedicated managers coming in at 2.47 per cent and 0.79 per cent respectively as preliminary numbers showed. Japanese managers were also down 0.95 per cent in March and down 0.84 per cent year-to-date.
Eurekahedge reports that event driven hedge fund managers posted the steepest decline, down 3.04 per cent during the month - their worst monthly performance since January 2016. Q1 2018 losses for the strategy came in at -2.53 per cent, the worst among all strategic mandates.
Emerging market mandates were down 0.22 per cent with losses mitigated by Eastern Europe and Russia mandated funds’ performance. Frontier market mandate, as represented by the Eurekahedge Frontier Markets Hedge Fund Index was up 0.87 per cent for the month.
The Eurekahedge Billion Dollar Hedge Fund Index which tracks the performance of the hedge fund industry heavy weights was down 0.45 per cent in March, bringing their Q1 2018 performance into the red, down 0.38 per cent.
The CBOE Eurekahedge Short Volatility Hedge Fund Index declined 0.88 per cent in March based on early numbers, with year-to-date losses for the index coming in at 7.62 per cent and expected to increase as the complete picture emerges. Meanwhile relative value and long volatility focused strategies are up 1.01 per cent and 1.21 per cent on an asset weighted basis.
The Eurekahedge Crypto-Currency Hedge Fund Index declined 42.49 per cent in March, bringing its Q1 2018 losses to 56.67 per cent, barely behind of the 51 per cent decline in the price of bitcoin in the first quarter of 2018.
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