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HFRX Global Hedge Fund Index down 0.73% in April (0.38% YTD)

Friday, May 02, 2014
Opalesque Industry Update - Hedge funds posted mixed performance with the HFRX Global Hedge Fund Index posted a decline of -0.73% in April 2014, while the HFRX Absolute Return Index declined -0.27%.

HFRX Relative Value Arbitrage Index posted a decline of -0.16% for the month of April with mixed contributions from Multi-Strategy and Convertible Arbitrage managers. HFRX RV: Multi-Strategy Index gained +0.10%, with contributions from US Corporate Credit and Global Fixed Income strategies. HFRX Fixed Income Credit Index posted a decline of -0.34 % with gains in North American credit and Distressed exposures offset by Asian Convertible strategies. The HFRX MLP Index gained +2.28%, the 8th consecutive gain for the Index, on continued demand for yield generating energy infrastructure partnerships.

HFRX Macro Index posted a decline of -0.56% for the month of April with declines across systematic trend-following managers and discretionary strategies. HFRX Macro: Systematic Diversified Index declined -0.66% despite positive contributions from long term trend following strategies as these were offset by shorter term trend reversals and high frequency strategies. Performance across currencies was mixed, with gains in commodities including Natural Gas offset by losses in long US dollar exposure. Discretionary Macro strategies posted small losses across currency strategies, while Emerging Markets fixed income exposure also contributed to losses.

HFRX Event Driven Index posted a decline of -0.68% for the month of April, with positive contributions from Merger Arbitrage strategies offset by Equity Special Situations and Distressed/Restructuring managers. In an active month for corporate transactions, Apple priced a $12 Billion bond offering, US pharmaceutical Pfizer engaged to purchase UK rival AstraZeneca and the LBO buyout Energy Future filed for bankruptcy protection. HFRX Merger Arbitrage Index posted a gain of +0.11%, the 8th consecutive gain for the Index, with contributions from transactions in Pfizer/AstraZeneca, Facebook/Oculus VR, Suntory/Beam, Actavis/Forest Labs and Tower Financial/Old National Bancorp. HFRX Special Situations Index declined -0.87% with contributions from core positioning in American Realty, Hertz, Sensient Technologies, McKesson, Apple and Time Warner. HFRX Distressed Index posted a decline of -0.19% with contributions from restructurings from Energy/ Basic Materials Technology offset by declines in Consumer sectors in the US.

HFRX Equity Hedge Index posted a decline of -1.42% for the month of April, with gains in market neutral strategies offset by declines in directional strategies. HFRX Market Neutral Index gained +0.55%, the 7th consecutive month of gains for EMN, with gains across both factor-based models and fundamental, trading oriented strategies. HFRX Fundamental Value Index and HFRX Fundamental Growth Index posted declines of -1.38% and -1.82%, respectively, with weakness concentrated in European equities as well as Technology exposure.

Global financial markets posted mixed performance for April, as Technology equities partially recovered steep intra-month losses, while geopolitical tension and uncertainly over Ukraine remained significant and M&A activity remained robust. US equities posted mixed performance with the Technology and small cap equities posting declines, while large cap equities recovered intra-month losses to post a narrow gain for the month. Technology, Cyclical, Financials and Healthcare sectors led declines for the month, which were offset by Energy, Durables and Telecom. European and Asian equities were mixed with Euro gains in France and the UK offset by declines in Russian and the Netherlands, likewise declines in Japan and Korea were offset by gains in Singapore and Australia; across other Emerging Markets, equities gained in Brazil, Argentina and the Middle East. US treasury yields fell as the yield curve flattened with gain in longer dated maturities; European yields also fell across most maturities. Apple priced a $12 Billion bond offering, US pharmaceutical Pfizer engaged to purchase UK rival AstraZeneca and the LBO buyout Energy Future filed for bankruptcy protection. The US dollar declined against most currencies including the British Pound Sterling, the Euro and the Japanese Yen, while most commodities posted gains led by Natural Gas, Gold and Coffee, with these partially offset by declines in Silver, Crude Oil and Hogs.

Comments reference performance figures for April 30, 2014

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