In April, after a pause in March, the stock market resumed its strong upward trend, as illustrated by the notable performance of the S&P 500 index (+2.96%), which has significantly outperformed the hedge-fund industry over the past few months. Similarly, implicit volatility continued to wane (14.8%) and reached its lowest level for the past four years.
On the fixed-income market, after a mildly positive result in March, convertible bonds (+2.68%) scored well again, and were joined by regular bonds (+0.86%), which ended a series of five months of losses with a significant profit. The commodities market (+4.57%) continued its persistent rise, managing eight consecutive monthly performances above 2%, and a cumulative profit of 52% over the period. Conversely, the dollar (-3.39%) registered its sharpest loss in the past five months.
In such conditions, all hedge-fund strategies were profitable; although not as much so as the stock market. Despite the good results of convertible bonds, the Convertible Arbitrage strategy (+0.12%) struggled for profitability, as its performances slackened over the past four months. The continuing fall of the dollar and rise of the commodities market benefited the CTA Global strategy (+3.82%), whose trend is frenetic but positive.
With regard to its limited exposure to the stock market, the Equity Market Neutral strategy (+0.97%) managed a remarkable profit and recorded a series of five consecutive monthly returns above 0.5%. As expected, the other equity-oriented strategies, Event Driven (+1.19%) and Long/Short Equity (+1.35%), performed well and reached an eighth month of consecutive gains.
Overall, the Fund-of-Fund strategy (+1.14%) certainly took advantage of the good performance of the stock market and scored remarkably well compared to its average return.
