Hedge fund managers outperformed falling stock markets in March with managed futures funds producing a return of close to 5 per cent. The CSFB/Tremont Hedge Fund Index, which comprises 334 funds, each with a minimum of $10 million (#11.35 million) in assets under management, fell 0.3 per cent in March, compared with a fall of 0.6 per cent in February.

The index is now at the same level at which it began the year. The best performing funds were managed futures funds, which returned 4.9 per cent for a gain of 5 per cent so far this year. Dedicated short-bias funds returned 4 per cent in March and have produced the best performance this year, with a total return of 11 per cent.

In contrast, the major stock indices all ended the month deep in negative territory. The Dow Jones was down 5.9 per cent in March, the S&P 500 index dropped 6.4 per cent, while the tech-heavy Nasdaq Composite fell 14.5 per cent over the same period.