Tue, Feb 9, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Morningstar 1000 Hedge Fund Index rose 0.7% in April, single strategy head funds gained inflows of $2.7bn in March ($835m for 1Q10)

Wednesday, May 26, 2010
Opalesque Industry Updates - Morningstar, Inc, a provider of independent investment research reported preliminary hedge fund performance for April 2010 and asset flows through March. In April, the Morningstar 1000 Hedge Fund Index rose 0.7% while the currency-hedged Morningstar MSCI Composite Index increased 1.1%. For the first four months of the year, these indexes were up 2.2% and 3.6%, respectively.

“April was a solid month for hedge funds,” said John Rekenthaler, Morningstar’s vice president of research. “Nearly every category of hedge fund experienced a gain in April, as most global assets rose for the month. The main exceptions were in Europe, which suffered from Greece’s economic crisis, but even European hedge funds fared well if they reduced their exposure to the euro by hedging into other currencies.”

The strongest performer among the Morningstar Hedge Fund Indexes was the U.S. Small Cap Equity category, with a gain of 2.6%. Once again, small U.S. stocks charged to a large gain, as the Russell 2000 Stock Index increased 5.7% in April, and 15.0% for the year to date. With a much more modest year-to-date rise of 5.5%, funds in the Morningstar U.S. Small Cap Equity Hedge Fund Index generally shied away from maintaining anything like full exposure to the stock market.

With the U.S. economy strengthening, the economically sensitive categories of Distressed Securities, Debt Arbitrage, and Corporate Actions all performed well. At an increase of 2.3%, the Morningstar Distressed Securities Hedge Fund Index was the month’s second-best performer, and remains in first place for the year to date among hedge fund categories with a rise of 9.9%. Close behind is the Corporate Actions Hedge Fund Index with a 2010 gain through the end of April of 8.1%.

Less happily, the Morningstar Short Equity Hedge Fund Index had a disappointing loss of 4.1% for the month, as the short managers in the index were neither able to hedge their stock-market exposure, nor to target relatively weak securities. The Short Equity index is now down 6.4% for the year to date through April, continuing an almost unabated decline since March 2009. The Morningstar Equity Arbitrage Hedge Fund Index shed 0.2% for the month, as equity-arbitrage managers struggled to find their bearings in a 2010 market that has seen them drop 1.3% for the year to date. Finally, the unhedged Morningstar Europe Equity Hedge Fund Index fell 0.5% for the month, while the currency-hedged Morningstar MSCI Europe Hedge Fund Index rose 0.7%.

With broadly diversified hedge funds, the Morningstar Multi-Strategy Hedge Fund Index comfortably outpaced the typical hedge fund of funds, picking up 0.7% in April as opposed to the 0.2% increase for the Morningstar Hedge Funds of Funds Index. For the year to date through April, the Multi-Strategy index has a modest but significant increase of 2.1%, while the Funds of Funds index is barely positive at 0.1%. In aggregate, Funds of Funds have struggled to keep pace with Multi-Strategy funds in recent years, and 2010 is appearing to be no exception.

Single-strategy hedge funds in the Morningstar database saw overall inflows of $2.7 billion in March, bringing flows into positive territory for the year of approximately $835 million through the first quarter. Source

kb

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. How Einhorn survived a nightmare year[more]

    From Bloomberg.com: Even when a hedge fund has an awful year, which was the case for David Einhorn's Greenlight Capital, there are lessons to be learned. Many funds would have had a tough time surviving a year like Einhorn experienced in 2015, when all the stars seemed to align against him and Green

  2. Legal - Hedge fund founder wins early release in U.S. insider trading case, Gramercy seeking $1.3 billion from Peru over land-bond dispute[more]

    Hedge fund founder wins early release in U.S. insider trading case From Reuters/Streetinsider.com: Former hedge fund manager Doug Whitman on Tuesday won a reprieve from serving the remainder of his two-year sentence for insider trading after several judges expressed skepticism that his 2

  3. Investing - David Einhorn finds a winner in Michael Kors[more]

    From Thestreetinsider.com: Greenlight Capital hedge fund manger David Einhorn took his lumps in 2015. The fund lost over 20 percent on the year amid bets gone bad being long a plunging SunEdison and short a couple high-flying FANG stocks. However, today Einhorn is again showing his stock picking pro

  4. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  5. Credit Suisse cherry picks hedge fund ideas[more]

    From FT.com: Credit Suisse Asset Management plans to cherry pick profitable concepts from hedge funds with the launch in Europe of a “best ideas” strategy. The investment arm of the Swiss bank said the strategy will separate it from other funds blighted by “overcrowding problems”. It comes at a time