With a return of 0.29% in March, hedge funds have yielded a 3.35% year-to-date return, according to the Hennessee Hedge Fund Index. Despite a drop in the Dow Jones Industrial Average, Nasdaq and S&P 500, hedge funds still climbed slightly upward.

Managing Principal Charles Gradante of Hennessee said the uptick was a signal of 2004’s first correction being completed. He did warn that despite a positive job outlook, the speculation of oil prices might wind up reducing their strength.

Topping the hedge fund indexes was the Latin American index, which rebounded from a March in which it was the worst performer. The 3.73% return was punctuated by a deal between Argentina and the IMF that helped stop a "large-scale default." The Hennessee International Index finished in second, posting a return of 2.2%,

The short-biased and telecom and media indexes were among Hennessee’s worst last month. While praising Asian markets, particularly China, Gradante expressed concern that 1994-style volatility may enter the hedge fund markets soon.

"Many hedge fund managers believe strong productivity is masking the spread of inflation, and consequently the Fed may be falling behind the curve," Gradante said.

Hennessee is a hedge fund advisor that does not consider itself a tracker of funds.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.