Hedge Funds Delivered Two-Decade Record Performance in the First Quarter

The composite index measuring performance in the hedge fund industry ticked 6.1% in the first quarter this year, according to Hedge Fund Research.

The gains in hedge funds were fueled by continued allocations of funds, with capital exceeding a $3.8 trillion estimate, up by $201 billion since the beginning of the year.

The performance in hedge funds came amid significant losses sustained by some funds, with Reddit short-squeezed Melvin Capital losing 54.4% in January.

HFR has termed losses sustained by some hedge funds as outliers, with bottom decile funds only losing an average of 7.75% against 25.77% gains among top 10 percent funds.

Event-driven funds were best performers, ending the first quarter with 8.21% gain, followed by equities at 7.36%.

The hedge fund earnings outperformed the S & P 500 Index whose returns surged  5.77%.

The first quarter hedge fund return was the highest since 2000, at the onset of the dot-com bubble-burst.