February 2011 Hedge Fund Performance Commentary

Eurekahedge

Introduction

Hedge funds were up for the seventh consecutive month in January, posting a marginal result of
1
0.06% for the month. Price movements in global markets were erratic in a month marked by various
themes including improving economic fundaments in the US, political instability in the Middle East and
rising inflationary pressure. The MSCI World Index was up 1.87% in January.

Japanese hedge funds delivered the best performance among the main hedge fund regions, gaining
1.26% in January. Managers leveraged on the better-than-expected earnings, corporate activity and a
strong yen to outperform the Nikkei 225, which was up 0.09% during the month. Returns from other
developed economies were also positive, with the Eurekahedge North American Hedge Fund Index
gaining 0.75% while European hedge funds were up 0.24%. Stronger outlook on the US economy, as
well as easing concerns on the European debt situation, drove up the regional markets – the S&P 500
climbed 2.26% while the MSCI Europe Index gained 1.83% during the month.

Returns from emerging markets hedge funds were mixed as Latin American hedge funds witnessed
marginal losses of 0.10% while Asia ex-Japan funds were down 1.20% in January. The regional
market indices also ended the month in negative territory. The MSCI EM Latin America Index was
down 4.17% while the MSCI AC Asia Pacific Ex Japan Index lost 0.59%. Notable among emerging
market hedge funds were managers investing in Eastern Europe & Russia, who gained 2.20% during
the month. Eastern Europe & Russia mandate hedge funds capitalised on the rallies in underlying
markets as the MSCI EM Eastern Europe Index was up 1.52% while the Russia AK&M Composite
Index finished the month with an excellent gain of 5.68%.

December 2010 and January 2011 returns

5%

4%

3%

2%

1%

0%

(1%)

(2%)
North America Europe Japan Asia Latin Eurekahedge
ex-Japan America Hedge Fund
Index
Dec-10 Jan-11
Source: Eurekahedge

The relatively modest returns across the regions came after a period of strong performance by hedge
funds at the end of 2010. The Eurekahedge Hedge Fund Index was up...

1
Based on 54.19% of funds reporting the January 2011 returns as of 14 February 2011.
1 | February 2011 www.eurekahedge.com
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