Hedge funds posted broad-based gains in May, benefiting from a global equity rebound and dislocations sparked by April’s trade-driven volatility. However, strategies exposed to commodities and fixed income faced headwinds, according to a report by Reuters citing bank prime brokerage data and industry sources.
Global hedge fund performance averaged a 3% return for the month through 29 May, according to a note from JPMorgan’s prime brokerage desk, pushing year-to-date gains to 5%. The rally was underpinned by a weakening US dollar and fading tariff concerns, which helped stabilise risk sentiment after a turbulent April.
Equity long-short funds led the way with a 3% return, while multi-strategy managers delivered 2.5%. Quantitative equity strategies outperformed with a 4.2% monthly gain, driven by strength in stock selection models and equity arbitrage.
Singapore-based Arrowpoint Investment Partners, a $1.1bn multi-strategy fund backed by Blackstone, Temasek’s Seviora, and CPPIB, capitalised on tariff-induced dislocations in Asian FX and rates markets, delivering close to 3% in May. The firm’s CIO, Jonathan Xiong, noted rising arbitrage opportunities in the region’s less liquid markets.
AQR Capital Management’s Apex Strategy returned 2.4% net in May, buoyed by corporate arbitrage and stock selection, while its Delphi Long-Short Equity Strategy gained 1.8%, taking YTD performance to 13.9%. AQR’s trend-following Helix Strategy was flat in May but remains up 7% for 2025, as gains in equities were offset by rate reversals.
Systematic macro strategies, however, struggled to navigate the rapid shifts in bond markets. Man Group’s AHL Alpha programme declined 2.19% in May, extending its 2025 loss to 11%, while Transtrend’s diversified futures strategy fell 5.42%, bringing YTD losses to 19.1%.
AHL portfolio managers noted in an April commentary that systematic funds have increasingly been forced to cut positions in response to rising volatility, often abandoning profitable trades as part of strict risk controls.
Among the better-performing multi-strats, Millennium Management posted a 1.7% return in May, though remains up just 0.4% for the year. Smaller Asia-focused manager Dymon Asia Capital delivered 3.3% in May, bringing 2025 gains to 8%.
