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In the week ending June 18th 2021, hedge funds managing less than $1bn averaged gains of 1.4% in May, extending returns for the year to 8.9%. That puts smaller funds ahead of billion-dollar-plus funds, which averaged 1% in May and 6.9% for the year so far. Long/short equity gains have fuelled the outperformance, with the industry's largest strategy by assets and funds up 11.2% among sub-$1bn funds so far this year, compared to 7.7% for those over.

May was the seventh consecutive month in the black with a 1.08% return for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. In aggregate hedge funds outpaced the S&P 500 Total Return Index by 38 basis points on the month. This stretch of positive results by hedge funds brings their year-to-date performance to 8.06%, modestly narrowing the gap to the S&P 500 Total Return Index which has enjoyed a 12.62% return over the same period.

Eurekahedge said hedge funds were up 0.87% in May 2021, supported by the strong performance of the global equity market which returned 0.83% during the month. In terms of 2021 performance, global hedge funds were up 7.71%, recording the strongest May year-to-date return since 2009 despite the ongoing pandemic. Roughly 71.4% of the underlying constituents of the Eurekahedge Hedge Fund Index posted positive returns in May, and 29.9% of the hedge fund managers in the database were able to maintain a double-digit return in 2021.

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