Street.Com – Hedge fund returns generally outran the broader market last month, and many strategies had similarly strong results for the first quarter as well.
“Hedge funds continue to outperform the S&P 500 index, with technology, Asia-Pacific and Europe leading the way,” said E. Lee Hennessee, managing principal of Hennessee Group. The Hennessee Hedge Fund Index rose 1.64% in March and 5.76% for the first quarter, beating both the S&P 500’s 1.25% return in March and 4.21% return in the first quarter.
Hedge funds also outperformed the Dow Jones Industrial Average, which rose 1.05% in March and 3.65% in the first quarter.
One solid performer was the equity long/short sector. The good performance of stocks in the January-to-March period helped managers who maintained a long bias and who bought energy and technology names. The HFN long/short equity average was up 2.63% in March and 7.02% for the quarter. Many hedge fund managers rotated from bonds to equity in late winter and benefited from a strong run in small-cap stocks.
“Hedge funds are chasing small-caps. They are much more short-term focused and they are going after something that is working right now,” said Jack Ablin, chief information officer of Harris Private Bank.
