By Anirban Sen
NEW YORK, April 16 (Reuters) – Hedge funds are on track for their best monthly performance in more than a decade, after overcoming a market downturn in March triggered by the Iran war that dragged returns lower, according to Goldman Sachs’ latest quarterly hedge fund industry report.
Here are some key takeaways from the report:
• Stockpickers that take long and short positions are up 7.7% so far this month to Tuesday’s close, Goldman said in the report sent to clients this week and reviewed by Reuters, as funds generated their best monthly returns since the start of 2016, when it started tracking the data.
• Year to date, long and short equity funds have posted gains of about 6.7%, with Asia- and China-focused fund managers leading the way. A short position profits when asset values decline, while a long position pays off when asset prices rise.
• Funds across all strategies on average gained 1.6% during the first quarter, after being down 1.8% in March when macro traders grappled with widespread losses during the market turmoil.
• During the March quarter, equity long-short hedge funds that invest across various industries were buoyed by the largest amount of inflows since 2022, benefiting from bullish sentiment, as allocators and limited partners bet on money managers despite recent struggles.
• In March, hedge funds incurred 35% of the losses of portfolios that were weighted 60% towards stocks and 40% towards bonds, low relative to industry benchmarks.
• Dispersion in returns of individual hedge funds rose in March to the highest in three years, reflecting a gap between winners and losers as volatility increased.
• During the quarter, equity long-short funds delivered so-called “alpha” returns, or profits that come from a trading edge rather than from broader market gains. Funds that were market neutral were up 10.3%, while those focused on healthcare gained 33.6% and Asia up 28.1%.
(Reporting by Anirban Sen in New York; Editing by Christian Schmollinger)
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