The Markets
Hedge Funds Beat S&P and MSCI in First Quarter
Hedge funds posted 2.10% returns for the first quarter, outperforming the S&P 500 and the MSCI World Index, according to research from Morningstar, Inc.
Reported by Adrien Martin
According to the research firm, most of the hedge fund gains came in January, with a return of 1.15%. In February and March, the funds had returns of 0.52% and .54%, respectively.
The top performing funds were convertible arbitrage funds and emerging market funds. According to Morningstar, the arbitrage fund category had 4.67% in gains, benefiting from increased volatility during the quarter as well as high levels of convertible bond issuance.
Emerging markets funds returned an average of 5.50%, with China funds leading the pack.
Developed-market equity hedge funds also performed well, with commodity (primarily energy), Europe, and Japan funds taking the lead and the equity net long and equity variable categories brought in 2.28% and 3.57%, respectively.
Hedge funds in distressed companies returned 4.15% in the first three months of the year. Event-driven and merger-arbitrage funds had a good showing as well, picking up 4.21% and 2.88%, respectively.
Some of the poor performers in the first quarter were equity net neutral funds, Global macro funds, and managed futures, according to Morningstar.