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Hedge fund returns turn negative after four-month run of positive performance

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Overall hedge fund industry returns turned negative in May after a four-month string of positive results to start off the year, according to the just-released May 2019 eVestment hedge fund performance data. 

Aggregate industry performance stood at -1.55 per cent in May, with year-to-date (YTD) performance positive at +4.77 per cent.
Equities created much of the pain for the industry during May. Among primary markets, Equity strategies fell sharply in May, coming in at -2.61 per cent. YTD returns are still positive at +6.05 per cent. Among primary strategies, Event Driven – Activist hedge funds and Long/Short Equity funds saw declines as well, of -3.16 per cent and -2.71 per cent in May respectively. These strategies are also still firmly in positive territory YTD, at +4.50 per cent and +6.88 per cent respectively.
Some other interesting points from the May

Among primary markets, Volatility strategies were best positioned to endure the difficult market environment in May. The group gained an average of +1.49 per cent in May and are +4.22 per cent YTD.

Among primary strategies, Quantitative Directional Equity funds, Distressed funds and Origination & Financing funds were all positive for May, but just barely.

May was a tough month for many managed futures strategies, led to the downside by the group of larger funds. Managed futures funds as a group lost an average of -1.20 per cent in May and the 10 largest reporting products declined an average of -2.59 per cent.

From a regional perspective, China focused funds declined an average of -7.51 per cent, but the group is still up over 10 per cent YTD 2019. Russia focused funds slipped into negative territory in May as well, at -0.30 per cent, but YTD results are still strong at +11.09 per cent for these funds.

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