Macro strategies lead March hedge fund gains

In March, hedge funds continued their strong performance from the first quarter of the year. The gains were led by strategies like macro, which had its best month since March 2022 and its strongest quarter in over 20 years, according to data from HFR. Various sectors contributed to the overall gains, including trend-following CTAs, energy, multi-strategy, healthcare, and cryptocurrency investments. This led to a significant increase in the HFRI Fund Weighted Composite Index (FWC) over the past five months, reaching its highest point since April 2021.

Macro strategies, which are designed to be independent from market trends, saw a notable surge in March and for the entire first quarter of 2024. Investors were focusing on factors like lower inflation, decreasing interest rates, and positive economic outlook, despite ongoing geopolitical uncertainties. Among macro strategies, systematic diversified and trend-following approaches showed particularly strong performance, marking their best quarters in decades.

Equity hedge funds also did well in March, with gains seen in energy, quantitative directional, and healthcare sectors. Event driven strategies, focusing on areas like special situations and distressed assets, also saw gains in March. Fixed income based strategies gained as investors positioned for changes in inflation and interest rates.