Hedge funds post fourth consecutive month of gains

Hedge funds post fourth consecutive month of gains

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Hedge funds posted their fourth consecutive month of gains in May, with equity strategies leading the pack in terms of performance, according to HFR.

The HFRI Fund Weighted Composite Index showed a modest rise of 0.7% for the month, bringing year-to-date gains for the through May to a sturdy 3.9%. The HFRI Fund of Funds Index climbed 1.1% for May and 4% year to date.

“May was another exciting month for hedge fund performance, as drivers shifted from the emerging market-dominated gains in April to a broad base of contributions from developed market equities, specifically technology and healthcare, as well as M&A, discretionary macro and fixed income exposures,” stated Kenneth J Heinz, president of HFR. 

The HFRI Equity Hedge Index advanced 1.3% in May bringing year-to-date gains to 5.1% and leading all main hedge fund strategies. Event driven strategies also advanced for the month, as M&A activity continued to surge, with the HFRI's index gaining 0.6%, bringing YTD performance to 3.9%.

Fixed income-based relative value arbitrage strategies also posted a gain of 0.5% for the month.

Macro hedge funds fared less well, being impacted by directional currency and commodity volatility in May and the HFRI Macro Index remained unchanged in May. 

The HFRI Emerging Markets Index posted a narrow decline of -0.06% for May, though emerging market leads regional exposures year-to-date with a gain of 6.5%.

“Hedge fund exposures and performance have effectively adapted to this dynamic and fluid macro environment, leading established benchmarks of equity market performance through May. As rates have begun to rise, a continuum of macroeconomic scenarios represents opportunities for funds which are able to generate performance through tactical execution and positioning” added Heinz.


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