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Hedge fund industry gains 5.46% in April

Thursday, May 14, 2020
Opalesque Industry Update - U.S. stocks had their best month in decades in April and hedge funds sailed to a 5.46% return in April, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P 500 Total Return Index was up 12.8% in April.

Year-to-date, the hedge fund industry is down 7.01% through April. The S&P 500 Total Return Index is down 9.29% over the same time period.

All sectors but two tracked by the Barclay Hedge Fund Indices were in the black for April, the exceptions being the Volatility Trading Index, which was down 0.17%, and the Emerging Markets MENA Index, which lost 2.00%. Markets were able to shake off dismal news including rapidly mounting unemployment numbers, plummeting oil prices and shrinking economies.

"In spite of the worsening news in the coronavirus battle, massive government stimulus programs buoyed equity markets and provided a favorable tailwind for hedge funds," said Sol Waksman, president of BarclayHedge.

As the world looked for solutions to a global healthcare crisis, the Healthcare & Biotechnology Index led the way in April with a 13.27% return. After emerging market indices were battered in March, several emerging markets hedge fund sectors were also among April's leading gainers. The Emerging Markets Global Equities Index returned 8.84% on the month and the Emerging Markets Asian Equities Index gained 8.77%.

Other leading April gainers included the Event Driven Index, gaining 8.02%, the Equity Long Bias Index, up 7.73%, and the Merger Arbitrage Index, returning 5.41%.

Year-to-date, only four hedge fund sectors were in the black, led by the Volatility Trading Index which was up 7.28% through the end of April. The Fixed Income Arbitrage Index posted a 2.14% year-to-date return, the Option Strategies Index was up 1.35% and the Healthcare & Biotechnology Index posted a 0.22% year-to-date return.

Among sectors in the red for the year, the Emerging Markets Latin American Equities Index was off 23.96%, the Pacific Rim Equities Index was down 16.71% on the year, the Emerging Markets Global Equities Index dropped 16.38%, and the Emerging Markets Eastern European Equities Index lost 14.99%.

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