Hedge funds recorded a second consecutive month of losses as the Eurekahedge Hedge Fund Index declined 0.51 percent in March. However, the hedge fund index still outperformed equity benchmarks like the MSCI World Index, which fell 2.2 percent during the month.
In the first quarter of the year, hedge funds have declined 0.10 percent compared with the MSCI World, which is down 2.24 percent during the period.
Difficult trading conditions in commodities and equities mixed with concerns over a trade war between the U.S. and China affected the performance of many funds.
Close to 56 percent of managers showed positive returns and about 5 percent posted year-to-date returns of more than 10 percent, industry data provider Eurekahedge reported.
Latin America-focused managers led the regional mandates this month with a 4.3-percent gain and relative value was the top-performing strategy, up 2.92 percent in March.
Latin American managers were also the best performers for the year so far, with gains of 5.21 percent, and distressed debt hedge fund managers posted the highest returns in 2018 to date, having gained 2.02 percent over the quarter, followed by relative value managers who generated returns of 1.01 percent.
Asian hedge funds meanwhile continued to slide, with losses among funds invested in India and China hitting 2.47 percent and 0.79 percent, respectively. Japanese managers were also down 0.95 percent in March and lost 0.84 percent for the year to date.
Event-driven hedge fund managers posted the steepest decline, down 3.04 percent during the month and down 2.53 percent for the year.
Concerns over global trade and weaker stock markets also affected European funds, which recorded a 0.5 percent decline in March. North American managers only lost 0.18 percent on average but outperformed regional equity markets.