Thu, Dec 18, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar reports hedge fund returns of 3.3% for first quarter

Monday, April 23, 2012
Opalesque Industry Update - Morningstar, a provider of independent investment research, today reported preliminary hedge fund performance for March and for the first quarter as well as estimated asset flows through February 2012. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, eked out a 0.1% rise in March, ending the first quarter up 3.3%.

"After a strong start in the first two months of 2012, hedge funds lost steam in March and presented a mixed picture," said Terry Tian, alternative investments analyst with Morningstar. "While many U.S. equity strategies delivered positive returns, emerging markets, managed futures, and currency strategies suffered losses."

The U.S. stock market continued to rally in March—the S&P 500 Index and the Russell 2000 Index rose 3.3% and 2.6% for the month, respectively, finishing the first quarter up 12.6% and 12.4%, respectively. The Morningstar MSCI North America Hedge Fund Index, which includes hedge funds investing primarily in U.S. stocks, rose only 0.5% in March and 5.5% for the first quarter. Hedge funds that invested in smaller-capitalization stocks, however, outperformed. The Morningstar MSCI Small & Mid Cap Hedge Fund Index advanced 1.1% in March, finishing the first quarter up 10.8%.

Emerging-markets oriented hedge funds struggled in March due to weaker-than-expected economic data from China. The MSCI China NR Index dropped 6.9% and the MSCI Emerging Markets NR Index fell 3.3% in March. The Morningstar MSCI Emerging Markets Hedge Fund Index declined 0.9% for the month.

March proved to be another difficult month for managed futures strategies, as the lack of trends in most markets (such as crude oil and soft commodities) and reversals in some others (precious metals and currencies, for example) contributed to losses. The Morningstar MSCI Systematic Trading Hedge Fund Index declined 1.9% in March, ending the first quarter down 0.4%.

Currency strategies experienced significant losses in March—the Morningstar MSCI Currencies Hedge Fund Index plummeted 4.9%, making it the worst-performing Morningstar MSCI Hedge Fund Index for the month. Commodity currencies, such as the Australian Dollar, Norwegian Krone, and Canadian Dollar, responded to the renewed concerns over China's growth and fell sharply in March, reversing their upward trends since the beginning of the year.

In February, single-manager hedge funds saw outflows of $708 million, while funds of hedge funds gathered $49 million after eight consecutive months of outflows. The U.S. long/short equity category experienced the heaviest redemptions among all single-manager categories, bleeding $1.2 billion. The diversified arbitrage and long/short debt categories received inflows of $482 million and $348 million, respectively.

The Morningstar release can be read here.

Press release

BC

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  4. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und

  5. Performance - Lansdowne, Man Group, other hedge funds profit from shorts in oil, Turmoil boosts hedge funds that bet against Russia, oil, CTAs post strongest returns since December 2010[more]

    Lansdowne, Man Group, other hedge funds profit from shorts in oil From Valuewalk.com: The rising short interest in oil companies implies that the worst for oil is yet to come. Data from Markit shows that short exposure in energy sector of S&P 500 is still looming close to the highest mar