WEST PALM BEACH, FL (HEDGECO.NET) – So far this year, hedge fund returns have been modest compared to previous years. However, hedge fund market analysts said such performance has not scared offinvestors. According to hedge fund return data provided by fund tracker CSFB/Tremont, hedge funds have returned about 3.13% this year.
But some categories of strategies are fairing better than the others. According to the latest data from CSFB/Tremont, managed futures strategies are still doing well. In February, managed futures returned 6.89%, making such strategies the best performer of all other hedge fund strategies.
While the overall hedge fund index is up 3.13% year-to-date, such numbers are still better than the average of 1.61% gained by the Dow Jones Industrial Average during the same period. However, the MSCI EAFE index is doing relatively better than the hedge fund index with a year-to-date average return of 3.78%.
But hedge fund market analysts are not worried by the modest hedge fund returns so far. Robert Schulman, the Co-Chief Executive Officer for Tremont Capital Management said, “We are not disappointed with these returns; you don’t want hedge funds to follow the stock market step by step and so hedge funds won’t go through the roof and they also won’t go into the cellar,” Schulman explained.
There is also the point that such numbers has not affected interest in hedge funds. In fact the opposite is the case, because according to market analysts, investor interest in hedge fund strategies still remains strong. Tim Jackson of Rocaton Partners, a Connecticut-based hedge fund consulting group said, �We don’t see the interest in hedge funds slowing down.�
New investment money is still coming into hedge fund strategies, as the year 2003 saw a record of new asset inflow into hedge funds, pushing the total hedge fund assets to over US$800 billion. Although new asset inflow into hedge funds for the first quarter of 2004 is not yet available, market analysts project that the trend from 2003 would also continue in 2004, meaning another year of record busting for hedge funds.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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