Tue, Jan 17, 2017
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. Southpoint Capital gains 3.8% in Q3, bringing year-to-date returns to 5.2%[more]

    From Valuewalk.com: Southpoint Capital Advisors, the $3 billion New York hedge fund founded by former employees of David Einhorn’s Greenlight Capital, added 3.8% net during the third quarter of 2016, bringing year-to-date returns to 5.2% and cumulative returns since inception (July 2004) of 237.4% a

  2. The Big Picture: The case for emerging market debt in 2017[more]

    Benedicte Gravrand, Opalesque Geneva: Emerging market (EM) assets outperformed in 2016 mainly because of stronger fundamentals and an improving international environment, with GDP picking up speed, leading to positive earnings revisions for the first time in five years,

  3. Opalesque Exclusive: $1.2bn Sagewood spins out of Stifel[more]

    Bailey McCann, Opalesque New York: Sagewood Asset Management, which has been operating within Stifel Financial Corp. since 2015, is officially launching as an independent $1.2 billion asset manager focused on volatility strategies. The New York firm's spin-out was announced in an investor let

  4. Short Selling - Long-short hedge funds are ditching the shorts to focus on longs[more]

    From Bloomberg.com: What happens when you take the "short" out of a long-short trading strategy? Some hedge funds are about to find out. Equity long-short fund managers, the biggest category in hedge funds, hold the fewest bearish stock bets on record, data compiled by Credit Suisse Group AG s

  5. SWFs - China sovereign wealth fund CIC plans more U.S. investments[more]

    From Reuters.com: China Investment Corporation (CIC), the country's sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets, its chairman said on Monday. CIC will boost its investments in private equity and hedge funds as wel