Felix Pinhasov's  Instablog

Felix Pinhasov
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Part-time investor particularly interested in resource companies.
  • Hedge Funds Swing To Positive Territory 0 comments
    Mar 20, 2012 5:12 PM

    Thanks to strong market performance and probably the use of leverage, hedge funds are solidly in the green so far this year. Riskier strategies focusing on emerging markets are topping the group with returns ranging from 6.37 - 11.95 percent. At the same time more conservative strategies, while positive, underperformed materially and range from 1.02 - 5.69 percent.

    Not surprisingly, funds with a bearish focus were the only group with negative returns, as the Short Bias Index returned a negative 9.7 percent.

    YTD (March 15, 2012) Returns by Index:

    Data Source: Hedge Fund Research

    After poor performance in 2011, the returns are more than welcomed and seem to catch investors' attention; hedge fund flows grew by 2.1 percent in March over February. The strong performance coupled with tamed market volatility should raise some caution going forward. After all the LTRO and second Greek bailout addressed liquidity and deferred the inevitable down the road. The LTRO failed to depress Portuguese borrowing rates and a second Portuguese bailout is believed to be likely; likewise, Greek elections are nearing and political rhetoric is likely to impact more than just Greek markets.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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