Hedge Funds Plod Along in April

May 15, 2002 (PLANSPONSOR.com) - Although hedge funds managed to outperform the major US indices in April, the double-digit returns of the past continued to elude investors.

The CSFB/Tremont Hedge Fund Index edged up 0.79% in April, bringing the year-to-date return to 1.5%, as traditional, long-only strategies continue to disappoint.

Over the month:

  • the S&P 500 stumbled -6.14%
  • the Nasdaq Composite lost a further -8.51%
  • the Dow Jones Industrial fell by 4.40%.

Eight of the nine strategies tracked by CSB/Tremont clocked positive numbers in April, with only managed futures, which involves investments in global listed financial and commodity futures markets and currency markets, posting a negative return.

Dedicated short-bias was April’s winning strategy, managing to eke out a 2.05% gain. Managers employing this strategy maintain a net short as opposed to a pure short exposure, taking short positions in mostly equities and derivatives.

Emerging markets remained the bright spot among the nine strategies, adding 0.12% over April and bringing the year-to-date total to 10.03%.

Performance for the CSFB/Tremont Hedge Fund Index, which comprises 381 funds, and the nine style-driven sub-indices are calculated monthly for capitalization and return. The index is reselected quarterly.