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From Komfie Manalo, Opalesque Asia:

Choppy markets hit hedge funds in May as the industry suffered losses during the month after four positive months this year with the HFN Hedge Fund Aggregate Index down -1.15% (+1.58% YTD). The S&P 500 Total Return Index (S&P) was -1.13% in May and +7.82% in the first five months of 2011.

But if there was some good news, early estimates by hedge fund tracker HedgeFund.net showed that while hedge fund performance took a dip last month, investor allocations continue to outweigh redemptions.

In its monthly report, HFN said that hedge fund assets fell an estimated 0.80% in May to $2.586tln. The drop in assets mainly comes from weak performance as investor allocations totaled $15.3bn during the month to generate a core growth rate (% asset change due to investor allocations/redemptions) of 0.59%. The figure is slight decrease from April, but well above the average for 2010.

Hedge fund assets reached $2.607tln in April, adding $57.6bn from the previous month as investors allocated new money and positive performance during the period (See Opalesque Exclusive: here).

Performance accounted for the majority of the asset increase in April with $41.2bn, while net inflows totaled $16......................

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