22/03/2010 Author: Shannon Hawthorne

Hedge fund indices reveal industry gains

Findings from the Edhec-Risk Alternative Index and the Credit-Suisse/Tremont Hedge Fund Index both paint a broadly positive picture of the hedge fund industry in February 2010, with the majority of hedge fund strategies performing relatively well.

Figures from the Edhec Index reveal that CTA Global strategies enjoyed the most growth (0.96%) last month, following the losses experienced by the strategy in previous months.

Long/short equity also scored positively on the index with gains of 0.94%, followed by event driven strategies, which grew by 0.70%. Both benefited from the stable performance of the stock market, which saw implied volatility fall below the 20% mark (at 19.50%) for the first time since May 2008.

The Credit Suisse/Tremont Hedge Fund Index also gained in February (0.68%) with managed futures emerging as the best performing strategy with returns of 1.81%, growth which largely stemmed from the successes of trend followers in foreign exchange and interest rate futures.

Like Edhec-Risk, the Credit Suisse/Tremont Index also revealed long/short equity as a strong performer, with returns of 1.32%, growth that enabled long/short equity managers to recover much of their January losses.

The index also showed Global Macro to have produced solid returns across both discretionary and systematic funds, with the strategy achieving overall gains of 1.10% in February.