Hedge Funds Gained In Q3; Directional Strategies Scored Biggest Returns

Tom Burroughes

9 April 2013

Hedge funds delivered total returns on average of 3.8 per cent in the first three months of 2013, and up 1.1 per cent in March from the previous month, lagging behind the rise in the US stock market, data showed, with the vast majority of the star performers being directional equity funds.

In the first three months of this year, the S&P 500 Total Return measure of equities was up 10.6 per cent and up by 3.74 per cent in March, Evesment, a technology and research firm, said.

Among the large funds (those of more than $1 billion of assets), returns were 3.37 per cent in Q3; among mid-range funds of between $250 million and $1 billion, returns were 3.09 per cent, and among smaller funds (less than $250 million), returns were 3.65 per cent.

Equity strategies delivered 4.76 per cent returns in the third quarter; credit strategies delivered 2.70 per cent, and volatility/options strategies were 1.23 per cent. Foreign exchange strategies were up by just 0.18 per cent, while commodity-based strategies lost ground, down by 1.66 per cent.

Long/short equity hedge funds were the outstanding strategy class, with returns of 5.5 per cent, while managed futures ranked bottom of the heap, at 0.71 per cent in the quarter.