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Hedge funds continue four-month streak with 0.54 per cent gains in April

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Hedge funds posted their fourth consecutive month of gains this year, up 0.54 per cent during the month of April, while underlying markets as represented by the MSCI AC World Index (Local) were up 1.17 per cent over the same period.

That’s according to EurekaHedge’s latest Index Flash Update which says that the Macron vs Le Pen run-up to the French presidential election provided some relief for the markets especially for European equities as expectations for a Macron victory in the second round seemed likely.
 
In the Eurozone and elsewhere in the world, economic data for Q1 2017 was largely encouraging with indicators pointing towards global economic expansion.
 
Among regional mandates, Asia ex-Japan mandated hedge funds topped the table for the month, gaining 1.18 per cent, followed by emerging markets and Latin American-focused hedge funds with gains of 1.10 per cent each. Latin American equities were modest in April, with the Mexican IPC Index gaining 1.48 per cent while the Brazilian Ibovespa Index was up 0.48 per cent over the same period.
 
The renegotiations of the NAFTA deal by the Trump administration proved to be a relief for the three countries in the agreement, which would otherwise have seen the NAFTA being abolished. However, much remains to be seen as the extent of renegotiations remains a big question mark. Hedge fund managers allocating into developed mandates were also in positive territory this month with European managers gaining 0.99 per cent while North American and Japanese counterparts were up 0.78 per cent and 0.49 per cent respectively.
 
On a year to-date basis, hedge funds are up 2.90 per cent while underlying markets gained 6.29 per cent. Latin American hedge fund managers led the table up 7.54 per cent followed by their Asia ex-Japan and emerging markets counterparts with gains of 7.01 per cent and 6.83 per cent respectively.
 
CTA/managed futures hedge fund managers retracted 0.21 per cent in April with underlying commodity-focused hedge funds leading much of the weakness, down 1.62 per cent for the month. On a year-to-date basis, CTA/managed futures hedge fund managers declined 0.76 per cent with commodity-focused hedge funds retracting 1.27 per cent.
 
Emerging market mandates gained 1.10 per cent for the month with strength led by underlying Asia ex-Japan and Latin American mandates. Frontier markets, as represented by the Eurekahedge Frontier Markets Hedge Fund Index is up 1.39 per cent for the month.
 
The Eurekahedge Long Short Equities Hedge Fund Index gained 0.93 per cent during the month with strength led by underlying equity long-bias hedge funds which gained 1.25 per cent over the same period. On a year-to-date basis, long/short equities hedge fund managers gained 4.68 per cent with underlying equity long bias hedge fund managers at 6.79 per cent YTD.
 
Asia ex-Japan mandated hedge funds outshone regional peers, gaining 1.18 per cent during the month. Underlying Greater China and India hedge fund managers were up 0.83 per cent and 3.45 per cent over the same period respectively. On a year-to-date basis, Greater China and India mandated hedge funds posted impressive gains, up 8.60 per cent and 14.62 per cent respectively.
 
Among volatility-focused hedge funds, short volatility hedge funds topped the table for April, gaining 1.13 per cent while long-volatility hedge funds posted the steepest decline, down 1.25 per cent. On a year-to-date basis, short volatility hedge funds gained 4.71 per cent while tail risk hedge funds were down 5.73 per cent.

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