Mon, May 25, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds gain +0.5% in May as bonds, currencies fall - HFRI

Friday, June 07, 2013
Opalesque Industry Update: Hedge funds posted their 7th consecutive monthly gain in May and the 11th gain in the last twelve months as strong performance in Equity Hedge and Event Driven strategies offset weakness in Macro and CTA strategies, according to data released today by HFR.

The broad-based HFRI Fund Weighted Composite Index advanced +0.5 percent for the month, led by a gain of +1.8 percent for the HFRI Equity Hedge Index. Equity Hedge, the largest strategy area for the equally-weighted HFRI Composite, saw gains distributed across most sub-strategies, with Fundamental Value, Sector Technology and Fundamental Growth advancing +2.5 percent, +2.4 percent, and +1.1 percent, respectfully. Meanwhile, Short Bias funds detracted from overall Equity Hedge performance, declining by -3.2 percent.

The HFRI Event Driven Index added +1.7 percent in May, its 12th consecutive monthly gain, powered by the continuation of the dynamic market for corporate transactions. The HFRI ED: Distressed/Restructuring Index advanced +1.7 percent for the month, while funds specializing in Special Situations and Activist strategies gained +1.7 and +4.9 percent, respectively.

Fixed Income-based Relative Value Arbitrage, the largest hedge fund strategy area by capital with $640 billion in AUM, also posted its 12th consecutive monthly gain and the 46th gain in 53 months since the onset of the Financial Crisis in December 2008. Despite the sharp rise in bond yields, the HFRI Relative Value Index advanced +0.06 percent in May, led by a gain of +1.9 percent in the HFRI RV: FI - Convertible Arbitrage Index. Credit Multi-Strategy funds and Yield Alternative strategies gained +1.7 percent and +0.4 percent, respectfully, in May.

The HFRI Macro/CTA Index declined by -1.5 percent for the month, on weakness in quantitative trend-following CTA and Commodity-focused strategies. The HFRI Systematic Diversified CTA Index fell -2.2 percent, reversing a similar gain from the prior month, with negative contributions across equity, fixed-income and commodity exposures. Partially offsetting these declines, Discretionary Macro strategies added +0.2 percent while performance was mixed across Currency-focused Macro strategies.

“The performance gains seen in May are significant because in contrast to prior months, when risk-on sentiment and powerful equity market beta globally drove performance, May was dominated by a sharp reversal in the Nikkei, concerns about the impact of curtailment of quantitative easing by the U.S. Federal Reserve and a sharp rise in bond yields globally,” stated Kenneth J. Heinz, President of HFR. “Risk-on sentiment quickly reversed to risk-off into month-end and while certain quantitative, trend-following strategies were adversely impacted by these reversals, strong positioning and effective hedging across Equity, Event and Arbitrage drove gains across the HFRI indices, underscoring the powerful dynamic of strategic diversification inherent in investible indices and across heterogeneous fund strategies.”

Heinz added, “While the extent and continuation of equity market gains may be unclear at this point, the eventual curtailment and extraction of stimulus measures is likely to contribute to a challenging, volatile and uncertain environment, and hedge funds are tactically and strategically positioned to generate performance and preserve gains through just these sorts of conditions.”

HFR

Press Release

BM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Comment - Top hedge fund managers talk about how easy their jobs have gotten, BlackRock to Schroders warn of Argentina’s $20bn bond glut, The 35-year “investment supercycle” is drawing to a close, says Bill Gross, Gundlach: When the Fed starts hiking rates, 'GET OUT' of this asset class[more]

    Top hedge fund managers talk about how easy their jobs have gotten From Businessinsider.com.au: Time was, before the financial crisis hit, corporate boards treated multi-billion dollar hedge fund managers like Jehovah’s Witnesses pounding on their doors and flashing bibles. But no more.

  2. T Rowe's challenge to Dell deal may fuel critics of 'appraisal'[more]

    From Reuters.com: An increasingly popular tactic used by hedge funds and others to extract more money from buyouts could soon face a major courtroom test when a big investor in Dell Inc may argue that it should be paid a higher price for the 2013 acquisition of the PC maker. The strategy, known as "

  3. News Briefs - Ergen says LightSquared plan unfairly favors hedge funds, Why hedge fund managers make good advisory clients, I learned a lot about dad-bros after spending 4 days in Vegas with 2,000 hedge funders[more]

    Ergen says LightSquared plan unfairly favors hedge funds LightSquared Inc.’s bankruptcy plan gives hedge funds that invested in the broadband company a leg up while blocking telecommunications firms from competing with it, a fund owned by Dish Network Corp. Chairman Charles Ergen said in

  4. Opalesque Exclusive: SEC approves proposed changes to Form ADV, '40 Act - comment period to follow[more]

    Bailey McCann, Opalesque New York: Hedge funds and providers of liquid alternatives will want to pay close attention to proposed reforms approved by the SEC yesterday. The changes will require more frequent reporting, as well as a closer look into social media, liquid alternative strategies, and

  5. New market regime has created more dispersion between managers[more]

    Komfie Manalo, Opalesque Asia: The month of April has marked the transition toward a new market regime, Philippe Ferreira, Lyxor AM’s head of research, managed account platform, commented in the May 5's Weekly Briefing. "The first quart

 

banner