GLOBAL - Market uncertainty hit hedge fund investment once again as funds posted only modest gains in February, according to the latest figures from Credit Suisse First Boston/Tremont.
The CSFB/Tremont index was up 0.68% for the month. Managed futures continued to outpace all other hedge fund styles, up 6.43% for the month and +38.63% on a year-to-date basis.
Dedicated short bias remained the worst performer with a -1.73% return (YTD: -4.41%).
Oliver Schupp, president of the CSFB/Tremont Index said: Markets continued to slip for the most part during February.
Hedge fund returns were modest, but largely positive, and continue to provide benefits for diversified portfolios.*
A recent survey showed that global hedge fund investment has slowed to its lowest point since 1974.
Research from the US-based Hennessee Hedge Fund Advisory Group revealed that global industry assets grew to US$592bn or by 5% in 2002. This compares to total industry growth of 82% since since 2000, up from US$324bn.
Hennessee, which advises over US$1bn of assets, polled 2,500 investors representing some US$60bn.
Hedge funds were certainly tested amid the turbulent markets that defined most of 2002. The Hennessee Hedge Fund Index experienced its first negative year since inception in 1987, finishing down -3.43%.
But in comparison, the S&P 500 finished down -22.19%, the Dow Jones Industrials Average fell -16.76%, and the NASDAQ declined -31.52%.
The performance of hedge funds in 2001 and 2002 has made it increasingly prudent to consider hedge funds as an equity or bond investment within traditional asset allocation, said Elizabeth Lee Hennessee, founder and managing principal of Hennessee Group.
Someday, we believe it will be considered imprudent not to include hedge funds within a stock and bond allocation.
The survey also highlighted that 43% of investors would consider raising their hedge fund investment in 2003, principally for portfolio diversification and downside risk protection.
*Performance for the CSFB/Tremont Hedge Fund Index and the ten style-based sector indices is calculated monthly. February, January and year-to-date returns for all categories are listed below and at www.hedgeindex.com.
A suite of liability driven investment (LDI) indices has been launched by STOXX and RiskFirst to aid trustees and consultants select, monitor and challenge managers.
British Airways and the trustees of one of its pension schemes are set to argue over the purpose of a pension scheme, leading to an impactful judgment for DB pensions. James Phillips explores the issue
Bank of England governor Mark Carney has said there is still a lot of data to consider before the Monetary Policy Committee (MPC) can decide when to next hike interest rates.
Savers are not squandering their tax-free lump sums under Freedom and Choice but are taking a more cautious approach to retirement, according to Prudential research.