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Hedge fund industry losses fall in May

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The hedge fund industry posted a loss of -0.66% in May, though losses narrowed from April’s decline of -2.35% according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.

By comparison, the S&P 500 Total Return Index eked out a slim gain of 0.18% in May.

For the year-to-date, hedge funds were down -5.88% through May, bettering the S&P 500 Total Return Index which lost -12.76% over the same period.

Among hedge fund subsectors, the balance was tilted decidedly to those losing ground for the month, with approximately two-thirds of subsectors in the red for May.

Subsectors in positive territory for the month were led by the Emerging Markets Latin American Equities Index, which picked up 2.42%. Other gainers included the Emerging Markets Global Fixed Income Index 1.43%; the Volatility Trading Index 1.35%; the Option Strategies Index 1.00%; and the Global Macro Index, gaining 0.76%.

Subsectors posting monthly losses in May included the Emerging Markets Eastern Europe Index, which tumbled -6.79%, the Healthcare & Biotechnology Index -3.10%; the Fixed Income Arbitrage Index -2.27%; the Emerging Markets MENA Index -2.01%; and the European Equities Index -1.92%.

A majority of hedge fund subsectors are underwater on a year-to-date basis, though there are a few notable exceptions: The Global Macro Index is up 8.62% so far in 2022 and the Emerging Markets Latin American Equities Index has advanced 7.07%. The Emerging Markets Latin America Index has managed 3.44% followed by the Emerging Market MENA Index, up 1.55% and the Equity Market Neutral Index with 1.46%.

Among subsectors posting year-to-date red ink, the worst losses have been unsurprisingly in Eastern Europe. The Emerging Markets Eastern European Equities Index is down -39.24% as of the end of May followed closely by the Emerging Markets Eastern Europe Index, underwater -32.32%. Elsewhere, the Healthcare & Biotechnology Index has lost -17.88% of its value and the Technology Index has given up nearly as much (-17.44%). Emerging Markets managers in Asia are also navigating challenges in 2022. The Emerging Markets Asian Equities Index is down -13.44% and the Emerging Markets Asia Index is down -11.99% on the year. The Emerging Markets Index has shed -10.54% and the Emerging Markets Global Equities Index is down -10.36%.

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