Hedge funds record first quarter gains

Hedge funds have been performing well over recent months, with the major indexes showing gains ranging between 3.26 and 5.87 per cent for the first quarter.

March saw significant hedge fund gains, the third consecutive month of positive performance, with managed-futures funds doing particularly well, recording a gain of 3.95 per cent last month.

Charles Davidson, senior hedge fund specialist at Standard & Poor's, which provides hedge fund indexes, commented that the hedge fund industry is looking strong.

"Many hedge fund strategies saw strong returns during the first quarter," said Mr Davidson.

"Strong trends across a number of asset classes, low market volatility, and an increase in global M&A activity are among the key return drivers so far this year."

Hedge funds take advantage of a wide range of investment strategies to boost returns for the wealthy institutions and individuals that invest in them.

Hedge funds invested heavily in energy companies and precious metals have done well due to the continued boom in energy and the high price of metals, particularly gold.

Funds with a greater reliance on currency, however, have performed less well.

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