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With US Q1 growth numbers revised downwards into negative territory, much depends on the recovery currently underway in Q2 before markets begin to form expectations about an eventual rate rise later during the year. However, given the many factors that could still derail the US economic recovery, the rate rise - when and if it comes - is likely to be minimal and long drawn out. Meanwhile, while the Eurozone Q1 growth numbers seem to suggest that the ECB's quantitative easing program is working itself in, a 'Grexit' still remains on the cards and could potentially be the key upsetter for markets in 2015. Over in Asia, China's moderating growth outlook fails to dampen the steep climb seen in its equity markets and it remains to be seen how regulators will cap this genie back into the bottle - without breaking the bottle that is.

Key takeaways for the month of May 2015:

• Hedge funds were up 4.37% May year-to-date with assets under management increasing by US$86.5 billion in the first five months of the year.
• The Eurekahedge Long/Short Equity Hedge Fund Index is up 7.17% May year-to-date, comfortably outstripping its total gains of 3.38% for 2014 as well as outperforming the MSCI AC World Index which is up 6.79% in the first five months of the year.
• Assets under management for Asian hedge funds hit their pre-2008 high, increasing by US$15 billion during the current year to reach the US$176 billion mark.
• Greater China mandated hedge funds lead the returns tables - up 25.21% for the year.
• CTA/managed futures funds posted their second consecutive month of losses, down 0.21% though they have seen net asset inflows of US$16.4 billion during the year.

Barring Latin America and Eastern Europe & Russia mandated hedge funds, most regional mandates ended the month in positive territory. Japanese hedge funds led with gains of 2.04% on the back of strong performance in underlying equity markets which were supported by a declining yen that depreciated 3.51% against the US dollar. Asia ex-Japan mandated hedge funds were up 1.65%, outperforming the MSCI AC Asia Pacific ex Japan Index[3] which declined 0.87% during the month. Managers investing with an Indian mandate grew 3.24% during the month while those investing with a Greater China mandate saw gains of 2.79%. The Eurekahedge Greater China Hedge Fund Index is up 25.21% year-to-date as underlying equity markets in China and Hong Kong have posted strong rallies during the year ?the Hang Seng Index is up 16.18% while the CSI 300 Index has gained 36.99% in the first five months of the year. European hedge funds were up 0.72% during the month, outperforming underlying markets as the MSCI AC Europe Index[4] gained 0.28% in May. Meanwhile, North America mandated hedge increased by 0.27%; while the region??long/short equity mandated hedge funds posted strong gains (up 1.14%), overall performance was tempered by the losses posted by North America CTA/managed futures hedge funds which were down 0.29% during the month.

Strategy Indices

Returns across the various strategic mandates were mixed during the month, with long/short equity managers leading the pack with gains of 1.37%, followed by arbitrage (up 0.44%), event driven (up 0.30%), macro (up 0.20%) and fixed income funds (up 0.11%). The Eurekahedge Long/Short Equity Hedge Fund Index is up 7.17% year-to-date, comfortably outstripping its gains of 3.38% from the preceding year as well as outperforming the MSCI AC World Index which was up 6.79% in the first five months of the year. All underlying regional mandates for long/short equity managers are in the green for the year. Asian managers lead with gains of 13.17%, followed by European, North American and Latin American managers - up 7.39%, 3.22% and 1.15% respectively. CTA/managed futures hedge funds posted their second consecutive month of losses in May, down 0.21% with trend following funds reporting losses from their exposure to industrial metals and softs which edged lower during the month. Also ending the month in red were multi-strategy, distressed debt and relative value hedge funds which were down 0.37%, 0.12% and 0.11% respectively.

[2] MSCI AC World Index (Local)

[3] MSCI AC Asia Pacific ex Japan Index (Local)

[4] MSCI AC Europe Index (Local)