Hedge funds posted gains in April, as global equities and bonds suffered historic declines, accelerating an unprecedented hedge fund outperformance trend driven by powerful, broad-based gains across macro sub-strategies, according to data released today by HFRI.
Hedge funds posted gains in April, as global equities and bonds suffered historic declines, accelerating an unprecedented hedge fund outperformance trend driven by powerful, broad-based gains across macro sub-strategies, according to data released by HFRI.
Extending the trend from Q1 2022, macro hedge funds surged to lead industry-wide gains in April, again posting strong returns as financial market volatility was exacerbated by skyrocketing inflation, rising interest rates and expectations for continued increases, and escalation of the Russian military invasion of Ukraine.
The investable HFRI 500 Macro Index surged +5.05% in April, extending its YTD return to +15.5% with strong contributions from commodity, fundamental discretionary, and quantitative, trend-following strategies. The investable HFRI 500 Fund Weighted Composite Index posted a negatively correlated gain of +0.2% for the month, extending its YTD return to +0.3%, as the S&P 500 posted the largest monthly decline since March 2020 and the Nasdaq posted the largest decline since October 2008.
Macro strategies surged to record outperformance in April, posting historic, negatively-correlated gains as equities posted steep declines.
Fixed income-based, interest rate-sensitive strategies posted mixed performance for the month as bonds and equities declined in a correlated manner as the US Federal Reserve prepared to increase interest rates to curb historic inflation; the investable HFRI 500 Relative Value Index declined -0.1% while the HFRI Relative Value (Total) Index fell -0.4% in April.
Event-Driven strategies, which often focus on out-of-favor, deep value equity exposures and speculation on M&A situations, posted declines in April, with losses led by higher beta Distressed and Activist exposures. Both the investable HFRI 500 Event-Driven Index and the HFRI Event-Driven (Total) Index declined -2.2% for the month.
Equity Hedge funds, which invest long and short across specialized sub-strategies, also declined in April, with the investable HFRI 500 Equity Hedge Index falling -3.25% while the HFRI Equity Hedge (Total) Index fell -3.1%.
Risk premia strategies posted mixed performance for the month, as the HFR Bank Systematic Risk Premia Commodity Index surged +6.75% in April, while the HFR BSRP Rates Index declined -7.89%.
