Systematic and global macro managers have a hard time with turning points and market reversals. March is a simple case study of that truism. While many equity hedge funds made money in March, the macro crowd was a net loser. With reversals in bonds and currencies and relatively range bound behavior in commodities, there was little room for return opportunities. March performance pushed macro managers into negative territory for the year. On the other hand, equity hedge funds showed good returns consistent with their generally lower beta exposure.
There have been a growing number of stories on the poor performance of active managers including hedge funds. The number of fund managers outperforming benchmarks is near all time lows, yet some research shows that this under performance seems to be cyclical as opposed to a long-term secular trend. With more discussion of stock market overvaluation, this may be a year where the stock-pickers are able to show their value through avoidance of the bad firms. With macro changes and overvaluation in many markets, this is an opportunity for active management to prove their worth.