Losses may have been small in February

Date: Wednesday, March 4, 2009
Author: Alistair Barr, MarketWatch

An index of managers compiled by HedgeFund.net slipped 0.04% last month, based on very early returns. Average losses will likely grow as more managers report results, the industry-tracking firm added.

Some of the worst-performing hedge funds may have shut down or stopped reporting results to databases like the one run by HedgeFund.net. That will make average industry performance look better, the firm noted -- something known as survivorship bias.

Despite that, February will still mark a second month of steady performance by the hedge fund industry, even as stock markets around the world slumped.

In the first two months of 2008, hedge funds will likely have outperformed the S&P 500 Total Return Index by almost 19%, HedgeFund.net said.

This is the biggest consecutive, combined monthly out-performance over equity markets since the stock market crash in October and November of 1987. That year, hedge funds outperformed the S&P by nearly 24%, HedgeFund.net noted.