Hedge Funds Slip a Bit In March

April 18, 2001 (PLANSPONSOR.com) - The CSFB/Tremont Hedge Fund Index dipped a comparatively small -0.3% in March, according to Roland Lorenzo, president and chief operating officer of Credit Suisse First Boston Tremont Index LLC.

Year-to-date, the CSFB/Tremont Hedge Fund Index was flat when major US stock indexes were suffering large losses.

In March and on a year-to-date basis, Dedicated Short Bias strategies fared well, returning 4.0% for the month and 11.0% for 2001. However, March’s best returns came from managed futures, which gained 4.9%.

Long/short equity strategies were hardest hit of the nine style-driven sub-indices tracked by CSFB/Tremont Hedge Fund Index, slipping 1.9% for the month.

Average US Hedge Fund Slips

The Average U.S. Hedge Fund posted a slight loss in March and the first quarter but still outperformed all of the major indices, according to Steven A. Lonsdorf, CEO of global hedge fund advisory firm Van Hedge Fund Advisors International.

The Average U.S. Hedge Fund returning -1.6% net and the Average Offshore Hedge Fund fell just -0.7% net. For the quarter, the Average U.S. Hedge Fund fell only -1.1% net, and the Average Offshore Hedge Fund posted a slight gain of 0.4%.

Lonsdorf noted that over half (58%) of the hedge funds reporting for the index reported gains in the first quarter, with the vast majority (88%) besting the returns from the S&P 500.

Short Shrift?

Not surprisingly given the rough markets the best performing strategies were in March were U.S. Short Sellers and Offshore Short Sellers, with returns of 7.0% and 6.4%, respectively. Short-sellers also topped the quarterly list with a 15% net return, followed by Offshore Short Sellers with 14.0% and Offshore Income funds, which returned 5.6% on a net basis.

In March, the NASDAQ lost 14.48%, the Wilshire 5000 fell 6.82%, the S&P 500 down 6.42%, the Dow dropped 5.87% and the Russell 2000 slid 5.03%.

Performance for the CSFB/Tremont Hedge Fund Index and the nine style-driven sub-indices are calculated monthly. March 2001, February 2001, and year-to-date returns for all categories are at www.hedgeindex.com .