March Aggregate Hedge Fund Results Obscure Industry Positives

13 Apr

March Aggregate Hedge Fund Results Obscure Industry Positives

Highlighting the importance of due diligence in the hedge fund selection process, March’s overall negative hedge fund industry returns of -0.46% obscure the fact that just north of 50% of hedge funds tracked by eVestment had positive performance in March. March’s results mark a second consecutive aggregate monthly loss for the industry, after 15 months of gains, according to the just-released March 2018 eVestment Hedge Fund Performance Report.

The strongest performing hedge funds so far this year are those focused on Africa and the Middle East. In March, Africa/Middle-East-focused funds returned +0.91%, bringing their year to date (YTD) performance to +7.76%. Africa and Middle East funds were also strong performers in 2017, returning +15.37% last year. Overall, emerging market hedge funds are among the leading segments so far in 2018, with nearly 75% of emerging markets funds posting positive results this year.

Some other interesting points in the report include:

  • China- and India-focused funds, last year’s top performers with +34.87% and +32.89% returns respectively, are starting off the year on the wrong foot with some of the most negative returns. In March, China- and India-focused funds returned -2.17% and -2.94% respectively. India funds are deep in the red YTD at -7.23%, while China funds are barely positive YTD at +0.98%.
  • Among primary strategies, Origination & Financing funds are the strongest performers, returning +0.69% in March and +1.58% YTD. Distressed funds were the weakest performing funds among primary strategies in March, at -2.16%, which brought their YTD returns to -1.08%.
  • Long/Short Equity funds, a big winner in 2017, posting +12.09% returns last year, have seen a reversal of fortune, with March returns coming in at -0.69% and YTD 2017 returns at -0.29%.

With market volatility ramping up around the world, hedge funds offer a variety of opportunities to protect and grow wealth and balance out a portfolio. And there are opportunities for great returns for investors who do careful due diligence and pick the right funds at the right time.

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