Opalesque Solutions

'Alternative Alternatives' investment funds up 0.07% in March (+0.14% in Q1)

April 26, 2013

'Alternative Alternatives' investment funds performed flat both in March and the first quarter this year, according to an estimation based on 622 single- and multi-manager funds currently listed in 25 categories in the Opalesque Solutions A SQUARE Fund Database (Source).

The Opalesque A SQUARE Index gained 0.07% last month, finishing the first quarter of 2013 up 0.14%. The A SQUARE Funds of Funds Index lost 0.47% in March, but is up 0.36% for the year. Sorted by asset classes, alternative-alternatives funds showed mixed results:

- Once again, infrastructure funds were the top performers with average gains of 2.96%. Real estate, credit, insurance, forex, trade finance and collectibles investment strategies had a positive month of March with average gains below 1%.

- Base & precious metals funds had another difficult month and an average loss of 2.67%. All other commodity- and equity derivatives-based investment strategies suffered small losses.

- For the first quarter of 2013, the top performing asset class was infrastructure (+12.37%), followed by collectibles (+4.48%), forex (+2.61%), trade finance (+2.55%) and credit (+2.27%). Negative results were posted by base & precious metals (-13.25%), all-commodity (-2.09%) and equity derivatives strategies (-2.04%).

A SQUARE database weighting by asset classes

Due to the losses mainly experienced by commodity investors, A SQUARE funds once more performed worse than both hedge funds and the global stock market: The Eurekahedge Hedge Fund Index gained 0.95% in March (+3.21% YTD), while the MSCI World Index was up 2.39% (+7.87% YTD).

12-month rolling equity market correlation of A SQUARE Index funds was measured at 56%, compared to 83% for the Eurekahedge Hedge Fund Index. The resulting stock market betas were 15% for the A SQUARE Index and 22% for the Eurekahedge Hedge Fund Index.

Florian Guldner, Opalesque Research