Robust returns for Hedge Funds in February

The funds submitting data to the Nedgroup Investments Hedge Fund Review returned 1.7% for February, reports Lizelle Steyn, Product Manager at Nedgroup Investments and compiler of the Review. In comparison, the FTSE/JSE All Share Index delivered 1.5%, despite losing some of its strength at the end of February, following statements by the Chinese government that it plans stricter control over the flow of capital.

Steyn says the trading category was the best performing category for the month, delivering 2.7% on average. However, the returns in this category were quite widely dispersed. "An investor in one of the trading funds could have obtained a return of anywhere between 2.6% and 8.9%. The long/short equity category yielded the second highest return average of 1.9%. Here the returns ranged between 1.5% and 5.5%. The funds in the fixed interest and market neutral categories, on average, achieved returns of 0.4% and 0.8% respectively, with returns in much narrower bands, which can partly be attributed to the lower net exposure of these funds to their respective markets."

According to Steyn, hedge funds delivered 18.3% on average for the 12 months ended February 2007. Over this period the long/short equity funds achieved the highest returns of 29.2%, on average. In comparison, the FTSE/JSE All Share and the All Bond Indices returned 38.6% and 5.9% respectively over the same period.