Early estimates indicate that the HFN Hedge Fund Aggregate Average, an equal-weighted benchmark of all single manager hedge funds and CTA/managed futures products in the 8,000 fund-strong
Early estimates indicate that the HFN Hedge Fund Aggregate Average, an equal-weighted benchmark of all single manager hedge funds and CTA/managed futures products in the 8,000 fund-strong HedgeFund.net database, gained 1.96 per cent in April but remains down 0.85 per cent so far in 2008.
Credit market worries eased in April and equity markets rallied, led by the energy, utilities and technology sectors. Oil prices set new records as supply side tightness and a broadening sense that peak production has come and gone led many analysts to raise estimates for the commodity’s 2008 price.
Energy sector funds produced their best performance for the past 27 months and were the best-performing group of hedge funds in April, helping turn their benchmark positive for the year. The HFN Energy Sector Average was up 5.70 per cent in April, although the gain is just 0.22 per cent for the first four months of the year.
As was the case in much of 2007, rising energy commodity prices have boosted funds focusing on specific emerging market countries or regions. The HFN Emerging Markets Average was up 3.23 per cent in April, albeit down 2.68 per cent for the year, but funds focusing on countries with strong fuel or energy production have performed better.
The HFN Middle East/North Africa Average is the best performing emerging market benchmark so far in 2008 with 1.36 per cent, following a rise of 6.54 per cent in April. Funds focusing in Brazil are the only other emerging market group to produce positive performance for the year with 0.36 per cent, after the HFN Brazil Average gained 4.31 per cent last month.
Funds investing in India and China rebounded from substantial falls in the first quarter, with gains of 7.63 per cent and 6.32 per cent respectively, but are still down 18.96 per cent and 8.16 per cent for the year so far.
Rising oil prices were not enough to sustain managed futures funds as a broader drop in non-energy related commodity prices resulted in underperformance in April. The HFN CTA/Managed Futures Average remains one of the best hedge fund benchmarks in 2008 with a gain of 8.42 per cent, but returned just 0.24 per cent last month.
Virtually all equity-related strategies enjoyed improved performance in April and are well above the S&P 500 Total Return Index for the year. Last month long/short funds were up 3.16 per cent, long-only funds 4.72 per cent and small/micro cap funds 3.06 per cent, while health care and technology sector funds gained 3.12 per cent and 4.31 per cent respectively. Funds focused on the financial sector declined by 0.90 per cent during the month and are down 3.00 per cent so far in 2008.
