Credit Suisse/Tremont Hedge Fund Index Up 0.74% In February

by Carla Johnson, Investors Offshore.com

19 March 2007

The Credit Suisse/Tremont Hedge Fund Index is up 0.74% in February, Oliver Schupp, President of the Credit Suisse Index Co., Inc., has announced.

“Despite recent market malaise in the Chinese equity market, the subsequent spread to the world-wide equity markets at the end of February, and turbulence in the sub-prime mortgage loan market, the majority of hedge funds ended the month up,” observed Schupp.

He continued: “The key components of the equity market decline were linked to negative comments emanating from the former US Federal Reserve Chairman, Alan Greenspan, coupled with China’s desire to slow growth by making it more difficult to purchase equities on margin."

"Although the month proved difficult, Ben Bernanke cited a 'reasonable possibility' that the economy will continue to advance, while hedge funds proved their ability to produce attractive risk-adjusted returns independent of broad market trends. The Event Driven Sector in particular managed to generate positive returns up, 1.6% for the month on the back of strong deal flows, widening credit spreads and company-specific announcements that created an interesting opportunity set for managers,” Mr Scupp continued.

Within the Credit Suisse/Tremont Event Driven category, Multi-Strategy, Distressed and Risk Arbitrage gained 1.81%, 1.21% and 1.15% respectively last month. Convertible Arbitrage also continued with an apparent resurgence in fortunes, returning 1.16% over the month of February. Long/Short Equity strategies produced more muted returns at 0.71%, while Managed Futures suffered a deep reversal, losing 4.38% in February compared with a 2.26% gain in January, when these funds were one of the strongest performers within the index.

The Credit Suisse/Tremont Index is constructed using the Credit Suisse/Tremont database of more than 4,500 hedge funds. It includes both open and closed funds located in the US and offshore, but does not include fund of funds.

Recommended