May was a difficult month for hedge funds globally. Commodity prices pared back as a result of frenzied selling in the first week with oil and silver in particular taking a hammering. The Dow Jones-UBS Commodity Index was down 8.36 per cent for May. Greece’s ongoing sovereign debt crisis continued to keep markets jittery, although the risks of it defaulting have at least been temporarily avoided. Understandably then, Asia’s hedge fund community faced some pretty strong headwinds last month.
Hedge Fund Research’s HFRI Emerging Markets: Asia ex-Japan Index ended down 2.59 per cent to leave it -1.91 per cent YTD. Singapore-based Eurekahedge’s Asia ex-Japan Index was slightly better, showing losses (at the time of writing) of 1.67 per cent to leave them up 0.57 per cent YTD. Its Asia Index was down 1.28 per cent. Japan funds, down 0.13 per cent, suffered their third consecutive month in negative territory. Given their zero correlation to equity markets, Asia ex-Japan CTA/Managed Futures strategies fared reasonably well in choppy conditions. Preliminary figures show they gained 3.92 per cent, although this still only leaves them up 0.08 per cent YTD. Relative Value was the next best performing strategy: up 3.37 per cent and 0.48 per cent YTD. Event-driven funds made slight gains of 0.47 per cent. At 9.09 per cent YTD, they remain the region’s leading fund strategy. Equity l/s funds were down 2.37 per cent (0.04 per cent YTD), wiping out gains made in April, whilst multi-strategy were down 1.22 per cent.