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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