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In March, global financial markets experienced sharp declines as tariff volatility and heightened uncertainty led to significant losses in large-cap technology stocks and cryptocurrencies. The US equity market led the downturn, with the technology sector and small-cap stocks suffering the largest losses. In Europe, France and the UK saw the largest declines. Emerging Markets, however, posted gains, driven by Brazil and China. Interest rates fell, particularly for shorter-term maturities, while long-term rates saw a slight increase. The US Dollar weakened against most major currencies. Commodities, including Copper, Silver, Cattle, Cotton, and Natural Gas, saw notable gains for the month.

Hedge funds posted mixed performance in March the month with the HFRX Absolute Return Index gaining +0.03% while the HFRX Equity Market Neutral Index gained +0.42%. The HFRX Global Hedge Fund Index declined -0.75%.

HFRX Event Driven Index declined -0.12% in March from declines in special situations managers and merger arbitrage strategies. The HFRX Special Situations Index declined -0.11% from declines in exposure to global catalyst-driven fundamental value equities. The HFRX Merger Arbitrage Index declined -0.17% as global equity markets posted sharp declines in March.

HFRX Relative Value Arbitrage Index declined -0.45% for the month led by declines in multi-strategy managers and convertible arbitrage strategies. The HFRX RV: Multi-Strategy Index declined -0.40% as interest rates fell in March. The HFRX Fixed Income Convertible Arbitrage Index declined -1.03% as volatility increased through the month.

HFRX Equity Hedge Index declined -1.33% in March from gains in market neutral strategies offset by declines in fundamental growth and value strategies. The HFRX Equity Market Neutral Index gained +0.42% from gains in mean reverting, factor-based strategies. The HFRX Fundamental Value Index declined -0.46% from declines concentrated in large-cap US & European equities. The HFRX Fundamental Growth Index declined -3.33% from declines in exposure to small-cap US & European equities.

HFRX Macro/CTA Index declined -1.33% for the month from declines in systematic trend-following managers. The HFRX Macro Systematic/CTA Index declined -1.17% as the US Dollar weakened against most major currencies and commodities mostly gained. Copper, Silver, and Natural gas led commodity gains. Cocoa and Aluminum led commodity declines.

Comments reference performance figures as of March 31, 2025