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Peter Douglas From Komfie Manalo, Opalesque Asia:

Despite offering better risk-adjusted returns, long/-short funds in Asia were outperformed by long-only strategies in March, according to Singapore-based hedge fund data provider of GFIA.

In its monthly newsletter, GFIA added that regional Asian long only funds were more active in adjusting their exposures compared to long/-short funds. However, it noticed that long/-short funds provide less volatility and tend to preserve capital even during bad times. Long/-short funds however, offer less returns compared to long-only funds during good years.

Peter Douglas CAIA, Principal of GFIA, commented: "In aggregate, long/-short funds charge 13% higher management fees, and 60% higher performance fees, than the long-only funds in our universe. The higher fee buys you more consistent performance, and risk mitigation not more performance."

The summary of their findings include:

• Correlations of long-only and long/-short funds with their benchmark indices are high, with the long-only tending to be slighter more correlated to the index than the latter
• Long-only Asia inc-Japan managers demonstrate more fluctuation in correlations with their benchmark, than their long-short counterparts, suggesting more active management of portfolio exposures.

Douglas further commented, "We noted that the long-only funds within our universe charge an average of 1.5......................

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