Hedge Funds Slip in February

Hedge funds stumbled slightly in February after starting off the year with gains, although the industry outperformed the major U.S. stock indices and outpaced a dismal performance in 2008, according to two research groups.

Hedge Fund Research reported on Friday that its composite hedge-fund index slipped 0.51% in February, while Hennessee Group said Monday that its hedge-fund index was down 0.78% last month. When compared with broad market indices, like the S&P 500's and Dow Jones Industrial Average's 11% declines, hedge funds outperformed by about 10 percentage points.

The missteps last month reverse the gains from January. HFR's composite hedge-fund index rose 0.39% that month, while Hennessee Group said its hedge-fund index was up a sharper 0.9%. ...