April 2011 Hedge Fund Performance Commentary Eurekahedge
Hedge funds were up for the ninth consecutive month in March as managers navigated successfully through turbulent market conditions. The Eurekahedge Hedge Fund Index was up 0.15%1 in March, bringing its year-to-date return to 1.26%. In contrast, the MSCI World Index was down 1.53%2 for the month.
All regions outperformed their respective underlying market indices in a month that started off with declines in global markets due to discouraging reports about the European debt situation, Chinese economic data and continued political tensions in the Middle East. The disastrous earthquake and tsunami in Japan on 11 March and the subsequent crisis at the Fukushima Daiichi nuclear power plant then led to a sharp sell-off in markets around the world.
Asia ex-Japan hedge funds delivered the best performance among the major hedge fund regions in March, gaining 2.18%. The MSCI AC Asia Pacific Ex Japan Index advanced 3.66% as a number of underlying markets posted significant gains. The BSE Sensex rose 9.1% on the back of strong foreign investment flows, while South Korea's Kospi and Thailand's SET gained 8.63% and 6.03%, respectively. Chinese markets also posted a strong recovery near the month-end, with the Hang Seng returning 0.81% and the Shanghai Composite posting 0.79%. Among other regions, returns from North American and European hedge funds were flat while Japanese managers delivered excellent downturn protection amid sharply falling markets. Japanese hedge funds lost 1.04% on average in March, while the Topix and the Nikkei 225 were down 8.61% and 8.18%, respectively.