New York (HedgeCo.net) – Investment research provder, Morningstar Inc., reported that hedge funds in their database saw overall inflows of $2.6 billion in February, bringing net outflows down to approximately $1.0 billion for the first two months of the year.
Hedge fund returns were bolstered by a global equity market rally in March. The MSCI World Stock Index climbed 6.0%, as stock markets in Europe, Asia, The United States, and emerging countries all showed substantial gains.
“Hedge funds remain cautious, but they are peeking their heads out at the stock market rally,” said John Rekenthaler, Morningstar’s vice president of research. “They are assuming greater market risk while equity markets rebound.”
Hedge funds in the database appeared to be hedged similarly in March as they were in November 2009, when hedge funds captured only a small fraction of that month’s equity market profits.
The Morningstar Emerging Market Equity Hedge Fund Index and the currency-hedged Morningstar MSCI Emerging Markets Hedge Fund Index rose 4.3% and 4.8%, respectively, in March. Eastern European stocks moved the most, benefiting from the European Union’s support of Greece.
Momentum in oil prices, which hit 17-month highs due to positive global economic data and President Obama’s new offshore drilling policy, as well as a rising U.S. dollar and falling gold prices, contributed to gains in trend-following funds.
Morningstar has approximately 8,000 hedge funds and funds of hedge funds in its database.
Editing by Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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