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HEDGE FUNDS DOWN IN FEBRUARY

Hedge funds were down in February, but outperformed the broad indexes.

Hedge funds returned to their losing ways in February, dropping 0.38% last month after breaking their losing streak in January.

The decline in the HFRX Global Hedge Fund Index cut its year-to-date return to 0.71%. Five of the eight HFRX strategy indices were in negative ground last month, “led” by distressed securities, which lost 2.06% (down 2.51% YTD). Other losing strategies included equity hedge funds (down 1.28% in February, up 1.42% YTD) and equity-market neutral (down 0.95%, down 0.95% YTD).

Convertible arbitrage funds, one of last year’s biggest losers, rose 2.15% last month, bringing its early year-to-date return to 8.18%. Relative value arbitrage funds rose 0.49% (up 2.84% YTD) and merger arbitrage funds rose 0.44% (up 0.76% YTD).