Hedge funds score seventh consecutive month in the black with 1.08 per cent returns in May

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The hedge fund industry notched its seventh consecutive month in the black, posting a 1.08 per cent return for the month of May, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. In aggregate hedge funds outpaced the S&P 500 Total Return Index by 38 basis points on the month.

This stretch of positive results by hedge funds brings their year-to-date performance to 8.06 per cent, modestly narrowing the gap to the S&P 500 Total Return Index which has enjoyed a 12.62 per cent return over the same period.

All but four hedge fund sectors tracked in the Barclay Hedge Fund Indices posted gains in May.

“While equity markets stumbled somewhat on inflation concerns, new US weekly jobless claims achieved pandemic-era lows as economies in the US and elsewhere showed encouraging signs of recovery from the pandemic downturn,” says Ben Crawford, Head of Research at BarclayHedge. “Moreover, surging prices for oil, basic materials and other commodities further contributed to investors’ economic optimism.”

Several emerging markets indices were among May’s top performers. BarclayHedge’s Emerging Markets Eastern European Equities Index led the way, up 5.63 per cent for the month. The Emerging Markets Latin American Equities Index returned 3.02 per cent, the Emerging Markets Sub Saharan Africa Index gained 2.59 per cent, the Emerging Markets Asian Equities Index was up 2.38 per cent, and the Emerging Markets Global Equities Index advanced 2.21 per cent.

Consistent with the broad market theme of profit-taking in technology securities, hedge fund sector laggards in May were BarclayHedge’s Healthcare & Biotechnology Index, down -1.67 per cent, the Technology Index, off -0.83 per cent, the Emerging Markets MENA Index, down -0.63 per cent, and the Convertible Arbitrage Index, down -0.01 per cent.

The Emerging Markets Eastern European Equities Index continues to set the pace amongst hedge funds sectors, stacking up year-to-date returns of 17.25 per cent. Other high-performing indices through May 2021 include the Equity Long Bias Index (13.38 per cent), the Distressed Securities Index (12.66 per cent), the Event Driven Index (12.04 per cent) and the European Equities Index (10.96 per cent).

No sectors were in the red for the year-to-date period at the end of May.