Selling Short Pays Off For February Hedge Fund Returns

Year-to-date through February the Average US and Offshore Hedge Funds have posted slight gains of 0.5% and 1.4%, respectively.

In fact, according to Van Hedge Fund Advisors, almost 50% of hedge funds reporting posted positive returns in February, while over 88% beat the S&P 500 for the month.

Not surprisingly given the rough markets in February, the best performing strategies were Offshore Short Sellers, US Short Sellers and Offshore Market Neutral-Securities Hedging, which had net returns of 11.5%, 9.3% and 2.0%, respectively.

For the year to date through February, US Emerging Markets Hedge Funds have posted the best net return of 11.9%. Offshore Short Sellers and US Short Sellers have gained 11.6% and 9.4%, respectively.

For the month, the hedge fund returns by investment strategy were:

• Aggressive Growth off 7.7%
• Distressed Securities – off 0.3%
• Emerging Markets – off 2.8%
• Fund of Funds – off 0.8%
• Income – up 0.9%     
• Macro – off 2.7%
• Market Neutral – Arbitrage – up 0.9%     
• Market Neutral – Securities Hedging – up 1.7%
• Market Timing – down 4.2%
• Opportunistic – down 5.3%
• Several Strategies – down 1.5%
• Short Selling – up 9.3%
• Special Situations – down 0.4%
• Value – down 2.7%

The hedge fund returns presented are net of fees and performance allocations. The February Index was created using a sample of 742 funds.