Hedge funds up slightly in May

Hedge funds were up 0.42% in May. Meanwhile underlying markets, as represented by the MSCI World Index were up 1.28% over the same period, according to the Eurekahedge report. On a year-to-date basis, 48% of managers were in the red this year, compared to 20% of managers who reported year-to-date losses over the same period last year.

Here are some additional findings.

• Distressed debt hedge funds posted the best gains during the month — up 1.65% with year-to-date returns of 2.64%. Distressed debt managers have had a rebound in 2016, compared to their performance over in 2015 (up 2.15% May 2015 year-to-date and down 4.41% in 2015).

• Latin American mandated hedge funds were the worst performers during the month, down 0.35%. Nonetheless, Latin American managers have outperformed the MSCI Latin American Index, which was down 6.01% over the same period.

• Asia ex-Japan managers gained 0.35% during the month and lost 1.98% year-to-date. Meanwhile, underlying Greater China hedge funds dropped by 1.44% in May, with losses of 5.73% on a year-to-date basis.

• Among developed market mandates, North American and Japanese managers were up 1.09% and 1.07%, respectively, followed by European managers with gains of 1.01%. On a year-to-date basis, North American managers led with 2.01% returns following a recovery from their February lows.

• Japanese hedge funds were down 2.91% in the first five months of 2016, their worst year-to-date return on record. A survey of Japanese investors reveals that 90% anticipate further easing from the Bank of Japan this year.

• The CBOE Eurekahedge Short Volatility Hedge Fund Index was up 1.95% during the month, as volatility levels declined towards the latter half of May. On a year-to-date basis, short volatility managers were up 1.46%.

Staff

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