Hedge Fund Data
Hedge fund industry performance review – March 2025
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In summary
Hedge fund performance was negative in March. Hedge fund strategy performance was mixed, with equity-oriented strategies notably underperforming. The average asset-weighted hedge fund net return across all strategies was -0.94%. The strongest performing strategy was arbitrage, and the weakest was equity long/short. Hedge fund performance dispersion increased compared to February.
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Aurum is an investment management firm focused on selecting hedge funds and managing fund of hedge fund portfolios for some of the world’s most sophisticated investors. Aurum also offers a range of single manager feeder funds.
Aurum’s portfolios are designed to grow and protect clients’ capital, while providing consistent uncorrelated returns. With 30 years of hedge fund investment experience, Aurum’s objective is to lower the barriers to entry enabling investors to access the world’s best hedge funds.
Aurum conducts extensive research and analysis on hedge funds and hedge fund industry trends. This research paper is designed to provide data and insights with the objective of helping investors to better understand hedge funds and their benefits.
| HEDGE FUNDS | ||
|---|---|---|
| Hedge fund composite |  | Hedge fund performance was negative in March. Hedge fund strategy performance was mixed, with equity-oriented strategies notably underperforming. The average asset-weighted hedge fund net return across all strategies was -0.94%. The strongest performing strategy was arbitrage, and the weakest was equity long/short. Hedge fund performance dispersion increased compared to February. |
| Long-biased | | Long biased funds monitored by Aurum’s Hedge Fund Data Engine returned an average of -1.03%, the second-weakest performing master strategy group during the month. Sub-strategy performance varied; commodities-focused long biased funds generated a positive return of 1.25%, while equity-focused long biased funds underperformed at -1.45%. |
| Quant |  | Quant funds monitored by Aurum’s Hedge Fund Data Engine returned 0.16% on average in March. Sub-strategy returns were diverse, with quant multi-strategy funds performing strongest at 2.88%, and risk premia the weakest at -1.56%. CTA strategies continued to struggle, returning -1.14%. |
| Equity long/short | | Equity long/short funds returned an average of -2.93% in March, the weakest performance among all master strategy groups. Sector-focused funds notably underperformed, returning -4.80%. |
| Macro | | Macro funds monitored by Aurum’s Hedge Fund Data Engine generated an average net return of 0.53% in March. Sub-strategy returns varied notably; commodities macro strategies were the strongest performers, up 1.47%, while macro emerging markets was the only sub-strategy with negative returns, down 0.47%. |
| Multi-strategy | | Multi-strategy funds monitored by Aurum’s Hedge Fund Data Engine returned an average of -0.67% in March. All AUM groups delivered negative returns. The weakest performing segment was funds with assets between $0.5bn to $1bn, which returned -4.22%. The largest multi-strategy funds (AUM greater than $5bn) showed relatively better resilience, returning -0.43%. |
| MARKETS | ||
|---|---|---|
| Major events | Global financial markets experienced heightened volatility in March due to escalating trade tensions. US equities entered correction territory, falling significantly from February peaks, as the U.S. imposed new tariffs on imports from China, Canada, and Mexico, prompting retaliatory measures and investor concerns over inflation and economic growth. | |
| Equities | | Global equities faced sharp declines in March as escalating trade tensions and concerns over economic slowdown intensified investor caution. US equity indices were negative, with notable weakness in technology and consumer discretionary sectors. |
| Government bonds | | Government bonds experienced significant volatility as inflation concerns and uncertainty about fiscal policy drove yields higher. However, in the U.S., despite notable fluctuations, the 10-year Treasury yield ended flat on the month as investors grappled with recession fears, concerns surrounding persistent inflationary pressures and heightened worries around escalating trade wars. |
| Corporate bonds | | Corporate bonds, especially investment-grade issues, were negatively impacted by rising economic uncertainty and increasing interest rates, resulting in wider credit spreads. Investor sentiment turned cautious, with concerns over corporate profitability and refinancing conditions prompting heightened selling activity, particularly within sectors perceived to be the most exposed to global trade and macroeconomic volatility. |
| Currencies | Currency markets witnessed significant fluctuations, with the U.S. dollar weakening against major global currencies. Investor confidence in the US dollar eroded due to mounting policy uncertainty and questions over its traditional safe-haven role. This prompted increased flows into alternative currencies and safe-haven assets such as the euro, Japanese yen, and Swiss franc. | |
| Commodities | | Commodity markets exhibited divergent trends during March with most commodity prices increasing over the month. Gold prices surged to record highs, driven by robust demand for safe-haven assets amid economic uncertainties and equity market turmoil. Following a decline in the first half of the month, oil prices increased due to supply concerns and escalating tariff threats as geopolitical risks showed little sign of resolution. |
The Hedge Fund Data Engine is a proprietary database maintained by Aurum Research Limited (“ARL”). For information on index methodology, weighting and composition please refer to https://www.aurum.com/aurum-strategy-engine/. For definitions on how the Strategies and Sub-Strategies are defined please refer to https://www.aurum.com/hedge-fund-strategy-definitions/
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