Hedge Funds Up Slightly in March

Year-to-date, the index has remained positive, returning 1.09%.   The index’s numbers are impressive when compared to the broader market indices: the S&P 500 Index down 3.15% for the year, the Dow Jones Industrial Average lower by 4.19% in 2003 and the Nasdaq Index up only 0.43% year-to-date, according to the Hennessee Hedge Fund Group.

March’s top performance was turned in by the Hennessee Latin America Index with a return of 8.20%, in a complete reversal after being February’s worst performing strategy. Brazil was the main driver in the region as it managed to receive another $4.1 billion from the International Monetary Fund and lowered its account deficit in February to $197 million from $1.1 billion a year earlier.   Year-to-date the index is up 5.04%.

The second best performer for the month was the High Yield Index, with a return of 2.43%.   As geopolitical uncertainties ease, speculative asset classes, particularly high yield and distressed are the main beneficiaries.   Further, March’s return helped to pad its 6.70% positive performance in 2003.  

In third place was the Healthcare and Biotech Index, posting a return of 2.34% for March due to positive news that large employers expect HMO premium increases of between 14% and 15% and that cost trends are stable. Year-to-date the index is up 1.43%.

Darker Skies

However, the sun was not shinning on the Pacific Rim Index, as it posted a negative 1.67% return in March, the worst performing strategy for the month.   The outbreak of SARS brought many firms in the Southeast Asian region to a standstill and news of fraudulent accounting at SK Global in Korea shattered investors’ confidence.   For the year, the index is down 2.65%.

The Macro Index followed with a loss of 1.25% as trades that made it the top performer in February, long bonds/short equities, long oil and gold, moved against the index quickly.   Although, on a positive note, the Macro Index is up 3.24% in 2003.   Rounding out the bottom three was the Emerging Markets Index with a loss of 0.82%, bringing the index’s year-to-date return to 0.67% in the red.