The composite Eurekahedge Hedge Fund Index rose 3.2 per cent in April, as the underlying markets rallied on the back of slowing economic contraction and better than expected corporate e
The composite Eurekahedge Hedge Fund Index rose 3.2 per cent in April, as the underlying markets rallied on the back of slowing economic contraction and better than expected corporate earnings results.
A marked increase in risk appetite saw large-scale buying in the equity markets, resulting in a sharp 10.9 per cent increase in the MSCI World Index during the month.
Hedge funds are up 4.1 per cent year-to-date, while the S&P 500 is down 3.4 per cent, despite the recent rally.
Net redemptions for April (USD8.6bn or 0.7 per cent) remain modest. USD8.7bn of fresh subscriptions (up from USD3bn at the same time last month), were offset by redemptions of USD17.3bn.
Hedge funds assets were down by USD1.4bn in April to USD1.32trn), as compared to an average monthly decline of USD74bn for the preceding six months.
All geographical investment mandates were positive in April with most regions up four to six per cent. Managers capitalised on the marked improvement in risk appetites and the resultant upturn in the equity markets.
Most Japanese managers (up 1.8 per cent on average) also turned in healthy returns; however, an activist fund, among some others, negatively skewed the index with notable losses during the month.
In Eastern Europe, long-bias strategies fared impressively, as regional markets rose 22.3 per cent on the back of global optimism coupled with higher oil prices; managers in the region were up 10.6 per cent on average.
Most strategic investment mandates were also positive in April, with the only exception being CTA/managed futures (-0.4 per cent). Managers of the strategy turned in mixed returns ranging from -20 per cent to 80 per cent for the month, with some – particularly those employing trend-following strategies – being negatively impacted by varied commodity movements coupled with volatility in the FX markets.
Long/short managers were up 4.7 per cent on average, with short-bias and market-neutral plays offsetting gains realised by long-equity exposure during the month. Relative value and event-driven managers turned in returns averaging 5.6 per cent and 7.8 per cent respectively, as a handful of managers recorded double-digit gains, benefiting from equity positions, among other things.
