Hedge funds were up for the fifth consecutive month in March, a month that saw mixed returns in underlying market indices, according to Eurekahedge.
The Eurekahedge Hedge Fund Index was up 0.69% during the month while the MSCI World Index finished with gains of 1.76%.
March witnessed diverging trends among global markets with US and European indices finishing with contrasting results. North America witnessed a continuation of the rally in equity markets amid a slew of positive economic data, while Japanese stocks also extended their winning run with further devaluation of the yen.
European markets underperformed during the month as concerns over the region’s sovereign debt situation resurfaced due to Cyprus’ banking crisis and question’s over its bailout.
Returns were mixed among the various hedge fund regions with Japanese managers posting the strongest returns during the month.
This was the seventh consecutive month of gains for Japanese hedge funds and the fourth consecutive month where the regional managers have outperformed their counterparts in other regions.
The first quarter of 2013 was also the strongest quarter on record for Japanese hedge funds and managers also attracted some asset flows from investors in March after witnessing net outflows for seven months. The Eurekahedge Japan Hedge Fund Index was up 3.67% in March as the Tokyo Topix gained 6.05%.
Bond prices also rallied amid higher trending equity indices as the new Bank of Japan governor is expected to continue the monetary easing policy. Some managers also reported gains from the weakening Japanese yen during the month, although the rate of depreciation slowed down at the end of the month amid concerns over European debt which sent some foreign capital into the currency.
Asia ex-Japan managers saw an end to their seven month winning streak as the Eurekahedge Asia ex-Japan Hedge Fund Index declined by 0.54% during the month. The MSCI Asia ex Japan Index was down 1.52% in March as major market indices declined. The ASX All Ordinaries was down 2.74%, the Kospi lost 1.07%, the BSE Sensex shed 0.14% while concerns over the Chinese property market saw the Shanghai Composite and the Han Seng decline by 5.45% and 3.13% respectively.