Pensions & Investment- Hedge fund performance in the first quarter was positive, beating most of the major market indexes, with average fund performance of 2.1%, according to data from Morningstar Inc.
Managers that report their performance to Morningstar’s database looked great compared with the 2.06% return of the Morgan Stanley Capital International Europe Australasia Far East index for the quarter ended March 31. The Russell 2000 index returned 1.95%; Lehman Brothers Intermediate Government/Corporate Bond index, 1.59%; Russell 3000 index, 1.28%; and Standard & Poor’s 500, 0.64%.
Morningstar’s hedge fund database tracks about 4,100 hedge funds with assets of $1 trillion and 2,000 hedge funds of funds with $500 billion in assets, said Ryan Tagal, director, hedge funds and alternative investments.
Morningstar’s aggregate data shows that the emerging markets category was the best performer in the quarter with an average total return of 5.07%. Other Morningstar fund categories with good net average performance relative to market indexes included distressed companies; 4.13%; convertible arbitrage, 3.89%; corporate event driven, 3.52%; equity variable funds, 2.89%; fund of funds, 2.78%; merger arbitrage, 2.73%; and equity net long exposure, 2.47%.
These strategies are well-represented among the 25 best performing hedge funds (with assets of at least $100 million) for the quarter in Morningstar’s database.
