Opalesque Industry Update - Hedge funds sealed the first quarter of the year with another month of negative returns, down 0.18%1 in March as managers navigated through a choppy start to the year. However, strong returns posted by fund managers in the previous month saw them through with the Eurekahedge Hedge Fund Index up 1.05% in Q1 2014, outperforming the MSCI World Index which has gained 0.67% over the same period.
Key takeaways for the month of March 2014:
- Global hedge funds were up 1.05% in Q1 2014, with North American and European fund managers leading the tables with returns of 2.50% and 1.63% respectively.
- Net asset flows for Q1 2014 stood at US$32.6 billion, with capital allocations to North American managers at US$ 17.7 billion and those for European managers at US$ 13.6 billion.
- Japan focused hedge funds posted their third consecutive month of negative returns - down 0.84% in March and 2.09% in the first quarter of the year.
- Latin America focused managers surpassed all regional mandates delivering the strongest gains – up 1.53% in March, and outperforming the MSCI EM Latin America Index2 by 2.45% in Q1 2014.
- Distressed debt investing hedge funds delivered their ninth consecutive month of positive returns – up 2.70% in the first quarter of the year.
- CTA/managed futures hedge funds continued to languish, down 0.98% in March and 0.33% in Q1 2014. Investors have redeemed US$5.0 billion from the strategy in the first quarter of the year.
- Eastern Europe & Russia focused hedge funds fared the worst, losing 2.54% in March and 8.02% in Q1 2014, weighed down by geopolitical tensions in the region.