Hedge Funds See Fourth Consecutive Month of Positive Returns in April

13 May

Hedge Funds See Fourth Consecutive Month of Positive Returns in April

Hedge funds gained an average of +1.26% in April, the fourth consecutive month of positive returns, following a five-month string of aggregate declines closing out 2018, according to the just-released eVestment April 2019 hedge fund performance data. Year to date (YTD) 2019 industry average gains of +6.52% lag a global balanced benchmark but represent the industry’s best first four months since 2006, when aggregate gains were +7.62%.

Among primary strategies, Event Driven – Activist strategies were big winners in April and YTD 2019, returning an average of +2.79% last month and +9.94% so far this year. This is a noticeable turnaround from 2018, when Event Driven – Activist funds were deep in the red at -10.30%.

Other interesting highlights from the new data include:

  • Managed futures funds again produced big gains in April, returning an average of +2.03%, bringing Q1 2019 returns to +4.66%. The group still has a way to go to offset 2018 average losses of -6.06%. The 10 largest funds in the space returned an average of +3.02% in April and are +6.77% YTD.
  • Long/Short Equity funds were another big winner in April, returning +1.79% last month and +9.84% YTD. As with Event Driven – Activist funds, Long/Short Equity funds are seeing a marked turnaround from their -7.03% performance in 2018.
  • Russia-focused funds gained the most of any emerging markets segment in April, returning an average of +2.61%, bringing YTD returns to 11.10%.
  • China-focused funds underwhelmed in April with +0.74% returns, but continue to be the industry’s best performing segment overall in 2019 with average YTD gains of +18.55%.

The full eVestment hedge fund performance data for April is below.

Industry BenchmarksAprYTD 201920182017
Hedge Fund Aggregate1.26%6.52%-5.09%8.94%
50% MSCI World/50% Citi WGBI1.52%8.68%-4.60%14.75%
S&P 5004.05%18.25%-4.38%21.83%
Primary MarketsAprYTD 201920182017
Broad Financial Derivatives1.80%3.97%-5.52%2.44%
Equity1.53%8.95%-7.52%13.45%
Broad Multi-Market1.28%4.21%-3.83%4.50%
Broad Capital Structure0.97%6.13%-3.44%8.90%
Fixed Income/Credit0.78%3.63%0.01%6.04%
Volatility/Options Strategies0.46%2.89%-2.40%4.81%
FX/Currency0.24%0.54%0.76%-3.46%
Commodities-0.60%2.19%-6.00%0.46%
Primary StrategyAprYTD 201920182017
Event Driven – Activist2.79%9.94%-10.30%10.89%
Managed Futures2.03%4.66%-6.06%2.75%
Long/Short Equity1.79%9.84%-7.03%12.14%
Distressed1.51%4.89%-0.31%6.64%
Quantitative Directional Equity1.30%5.15%-4.73%10.45%
Convertible Arbitrage1.09%5.99%-2.22%5.71%
Event Driven1.06%4.94%-1.94%7.42%
Macro1.05%3.24%-2.93%4.03%
Multi-Strategy1.01%4.48%-3.38%6.90%
Directional Credit0.97%3.70%0.67%5.32%
Origination & Financing0.88%3.13%4.99%6.69%
Relative Value Credit0.74%3.45%-0.98%5.48%
Multi-Strategy Credit0.71%3.17%0.03%5.70%
Market Neutral Equity-1.04%-0.23%-3.21%3.58%
Prominent Universes by SizeAprYTD 201920182017
Ten Largest Hedge Funds1.48%3.78%2.36%5.03%
Ten Largest Long/Short Equity1.31%4.65%-3.81%8.54%
Ten Largest Macro0.49%2.25%2.13%2.24%
Ten Largest Managed Futures3.02%6.77%-7.48%3.86%
Ten Largest Multi-Strategy0.41%3.23%-2.57%6.40%
Economic DevelopmentMarYTD 201920182017
Emerging Markets0.68%8.22%-10.84%19.55%
Country ExposureAprYTD 201920182017
Russia2.61%11.10%-13.20%13.17%
Japan1.01%3.09%-8.02%13.77%
China0.74%18.55%-16.63%34.76%
Brazil0.49%4.02%-2.26%15.13%
Asia ex-Japan0.22%6.91%-11.33%21.76%
India-1.60%1.57%-16.23%32.87%

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