Hedge Funds Follow Market in March - Flat

Hedge Funds Flat
Hedge fund indexes were flat in March of 2011, following in the footsteps of the S&P500 and other equity markets. The largest hedge funds in Morningstar's database were up just .1%. The S&P was up .04%

Following the financial meltdown in 2007 and beyond, hedge funds as a group had returns just about as disappointing as the broader market, making many question just how "hedged" the average fund is. In March anyway, hedge funds continued their lockstep performance with the markets.

2010: A Banner Year for Hedge Funds

Hedge funds had an incredible 2010 in terms of performance. The group averaged a return of just under 20% for the industries best year since 1996.


Hedge funds' strong performance in 2010 is a result of several factors including a strong equity market, low volatility, and the self-selection process that has eliminated weaker hedge funds over the last couple of years.

If the equity and commodity markets are able to continue their bullish run (and there is certainly no guarantee of this) 2011 could be another great year for hedge fund performance.