New York, HedgeCo.Net – Through the first four months of the year, the performance of the models on the HedgeCoVest platform and that of the S&P 500 break down in to three very distinct periods. In January, stocks were very choppy and ended up being down for the month. In February, stocks rallied sharply and recovered from the losses in January and then some. March and April show more choppiness, but with an upward skew.

The conditions in the overall market have definitely had an impact on the models and how they have performed on a relative basis. If we look at the chart of the models from January through February, we see that at the end of January, the three mock portfolios were all performing better than the overall market. As the market moved sharply higher in February, the models lagged a little and this is natural as the models use hedging strategies and will tend to lag when the market is going straight up. By the end of February, the mock portfolio invested equally among all models was lagging the overall market on a YTD basis, the performance of the mock portfolio invested equally among the top 10 models on the platform was virtually identical to the overall market and the mock portfolio invested in the top five models on the platform was beating the overall market on a YTD basis.

_{*The information contained herein does not suggest or imply and should not be construed, in any manner, a guarantee of future performance and/or investment advice. Past performance does not guarantee future results. Returns are historical and based on data believed to be accurate and reliable. This comparison is using mock portfolios of the top five performing models, the top ten performing models and all models on the HedgeCoVest platform. For a complete list of all models and their performance, please visit the platform.}

When the calendar rolled over to March, the first thing we saw from stocks was a quick 3.64% drop in the S&P over the first eight trading days. The index spent the next month and a half swinging back and forth and finally recovered the 3.64% on April 24. Essentially, from March 2 through April 24, the S&P 500 gained 0.01%.

During this eight week stretch where the overall market did very little, this is when the models on the HedgeCoVest platform performed considerably better on a relative basis. The mock portfolio invested in all models gained 1.81%, the mock portfolio invested in the top 10 models gained 2.57% and the mock portfolio invested in the top five models gained 4.78%.

_{*The information contained herein does not suggest or imply and should not be construed, in any manner, a guarantee of future performance and/or investment advice. Past performance does not guarantee future results. Returns are historical and based on data believed to be accurate and reliable. This comparison is using mock portfolios of the top five performing models, the top ten performing models and all models on the HedgeCoVest platform. For a complete list of all models and their performance, please visit the platform.}

For a possible explanation of why hedge fund strategies were able to outperform over the last two months, we spoke with Ron Breitigam, managing director at Lake Austin Advisors. “Despite no measurable increase in volatility, our model’s observed a greater dispersion among the performance of individual names (i.e. lower correlation) which affords more opportunity in security selection for both long and short positions. This is a great benefit when you are running a long/short strategy or a hedged equity strategy,” stated Breitigam.

By breaking down the market performance in to three different time periods, we can see how hedge fund strategies work to help investors. When the market was down, the models were also down, but not as much as the overall market. When the market rallied, the models rallied, but not as much as the overall market. When the market moved sideways for almost two months, the models outperformed the overall market.

The HedgeCoVest models are achieving what hedge fund strategies and hedge fund investors seek—to mitigate risk and achieve a sufficient absolute return, regardless of market conditions.