The Preqin All-Strategies Hedge Fund benchmark returned 0.26 per cent in May, marking the seventh consecutive month of positive returns for the industry. Overall, hedge funds have recorded just three months of losses since the start of 2016.
Multi-strategy hedge funds posted the highest returns of any leading strategy, at 1.40 per cent, while relative value funds were the only leading strategy to see losses, recording -0.38 per cent for the month. Despite falling slightly, 12-month returns for the industry are at 10.33 per cent, surpassing the expectations for hedge fund performance that investors gave Preqin at the start of the year.
Relative value funds saw losses of 0.38 per cent, the only leading strategy to lose ground in May.
CTAs posted gains of 0.28 per cent for the month, building on 0.43 per cent returns seen in April. This takes YTD performance into positive territory for the first time in 2017, at 0.09 per cent.
UCITS funds saw gains of 0.43 per cent in May, while alternative mutual funds saw marginal losses of 0.04 per cent. In 2017 so far, they have now seen gains of 3.43 per cent and 1.92 per cent respectively.
Funds of hedge funds returned 0.43 per cent, maintaining momentum from 0.53 per cent gains seen last month. Over the past 12 months, funds of hedge funds have now posted performance of 4.71 per cent.
North America-focused hedge funds posted losses of 0.22 per cent for the month, while Europe- and Asia-Pacific- focused funds both made gains of 1.08 per cent. However, over 12 months North America-focused funds have returned 11.44 per cent, the highest of any region.
Medium-sized hedge funds* posted the highest returns of any size classification, returning 0.80 per cent in May. They also overtake emerging hedge funds to post the highest 12-month performance, returning 10.94 per cent.
Amy Bensted (pictured), Head of Hedge Fund Products at Preqin, says: “Hedge fund performance has continued to make ground in May, despite some concerns about slowing growth in the US and Europe. There have only been three months since the start of 2016 in which hedge funds saw losses, and this should bolster investor confidence in the asset class. At the end of H1 2016, hedge fund investors reported that they did not broadly expect hedge fund performance to improve in the next 12 months: however, since then the industry performance has reached double figures for the period. “There are also positive signs of sustained momentum in other areas of the industry. CTAs have posted their first back- to-back months of gains since November-December 2016, while funds of hedge funds are seeing their longest period of positive performance since May 2015. Fund managers will be looking to capitalize on this momentum to show investors the value of hedge funds in providing downside risk protection and the potential for returns.”
