Opalesque Industry Update - UCITS compliant Hedge Funds posted the strongest gain since HFRU launch, with the HFRU Hedge Fund Composite Index rising +1.43% through mid-May. |
• HFRU Equity Hedge Index rose +2.30% through mid-May 2013, the strongest gain since January 2012, with positive contributions from exposures to technology, small cap, Japanese and Turkish equities. Broad-based European and US exposure also contributed to May performance.
• HFRU Event Driven Index posted a gain of +1.09% through mid-May, the strongest gain in 15 months, with positive contributions from European and Asian Merger Arbitrage and Special Situations exposures.
• HFRU Macro Index gained +0.83% through mid-May, with contributions from Currency focused, Fixed Income, Emerging Markets and Indian equities strategies only partially offset by weakness in Gold, Metals and Commodities.
• HFRU Relative Value Arbitrage Index posted a gain of +0.76% through mid-May, with gains from Real Estate and Property exposure and convertible exposure, both global and Japanese, only partially offset by idiosyncratic short credit exposure and long/short Credit Arbitrage strategies.
Global financial markets extended 2013 gains through mid-May, as the Japanese Yen broke 100 $/¥ for the first time since May 2009 and US equities posted record closes in 9 out of 11 trading days through May 15th. Broad-based US equity gains were strong across both growth and value as well as small and large caps, with sector leadership from Technology, Cyclicals and Financials. European equities also posted strong gains as Greek sovereign debt surged, equity gains were led by Germany, Switzerland, Italy & the Netherlands and Greek equities hit highest level since August 2011. Japanese stocks gained nearly 9% through mid-May leading Asian gains and bringing the YTD gain for the Nikkei to over 45%; India, China & the Philippines also posted strong gains. Government bond yields rose across most developed markets, with yields on US Treasuries, German Bunds and UK Gilts all rising; yields increased across Italy, Spain & France as well. Greek bond yields fell to the lowest level in over 3 years on credit rating upgrade, with yields approaching 8%. M&A continued at a brisk pace with transactions in GE/Lufkin Industries, AETNA/Coventry Health Care and Solvay/INEOS, while high yield credit tightened to yield less than 5%. Gold & Silver extended April declines, posting additional losses through mid-May; cattle, lumber, sugar and corn also posted declines. The US$ posted strong gains across the board on expectations for curtailment of stimulus efforts; the Dollar breached a 4 year high against the Japanese Yen, but also rising against the British Pound Sterling, Euro, Swiss Franc and Australian Dollar.