Hedge fund returns were up for the ninth month in a row, gaining 0.88% in March, according to flash estimates from the Barclay Hedge Fund Index.
Equity prices in most developed countries fared well in March, as national indices rose in all major markets except Japan and Ireland, says Sol Waksman, founder and president of The Barclay Group.
Fears of a hedge fund blow-up stemming from problems in the U.S. sub-prime lending sector seem to have been unfounded, he says.
Since July 2006, the Barclay Hedge Fund Index has gained 9.43%, an average of slightly more than 1.00% monthly return for the past nine months.
Although US equities have outperformed hedge funds during the past three quarters, 13.53 percent versus 9.43 percent, hedge funds provided a higher risk-adjusted return, according to Waksman.
Sixteen of Barclay’s 18 hedge fund indices showed gains in March. Barclay’s Emerging Markets Index rose 1.80%, Event Driven was up 1.54%, European Equities grew by 1.51%, Fixed Income Arbitrage was up 1.27%, and Multi Strategy gained 1.22%.
Two hedge fund indices lost value in March. Pacific Rim Equities fell 0.18% and Global Macro was down 0.66%.
Declining equity markets in Japan, Thailand and Taiwan brought down the Pacific Rim sector this month, says Waksman.
For the first three months of 2007, Barclay’s Merger Arbitrage Index has gained 5.25%, Event Driven 5.04%, Fixed Income Arbitrage 4.09%, Emerging Markets 4.06%, and Multi Strategy 3.90%.
The Barclay Hedge Fund Index is up 2.88% for the year.