Strong performance by long/short equity managers drove the CSFB/Tremont Hedge Fund index up by 6.5% ...
Strong performance by long/short equity managers drove the CSFB/Tremont Hedge Fund index up by 6.5% in February 2000, writes Robert Maharajh.
The strong result, in a month when the S&P 500 returned -2%, leaves the CSFB index up by 6.4% year to the end of February against the S&P's -7%.
The strongest performing individual sector was long/short equity, up 11.1% in February and up a total of 11.7% to the end of February. Emerging markets hedge funds also performed well, up 6% in February and a total of 4.4% to the end of February. Most of the gains on the long/short funds are likely to have been made on the long side. Dedicated short-bias funds were down -8.6% for February, with a year to end of February performance of -5.2%.
Global Macro funds, many of which suffered a poor first half of 1999, posted a good return, up 4.4% for February giving a gain of 1.9% year to end February.
Nicola Meaden, director of Tremont advisers, said: "Long/short equity managers clearly triumphed in February. No index performance comes close to the 11.1% return they posted.
"Nevertheless, looking at the overall index, it is important to bear in mind the benefits of diversification. With an allocation to all of the individual categories of hedge fund, despite a couple of negative groups, there was substantial outperformance of the major market indices."
The CSFB/Tremont index has returned 134.3% for the 74-month period since its inception. The index comprises 291 funds, including both offshore and US funds, but does not include funds of funds.
Other good performers for February were convertible arbitrage, which returned 3.4% for February, leaving the strategy up 6% year to end of February.
Event-driven strategies were up 2.3% in February, up 2.8% year to end February. Equity market-neutral funds were up 0.8% for February, with a total performance to the end of February of 2.2%.
Fixed Income Arbitrage returned 0.6% for February, giving a year to end of February return of 1.1%.
Second poorest performing single strategy of the nine in the index was Managed Futures, returning -2.1% for February, leaving it down -2.1% over the year to the end of February.
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