Friday, 25 July 2014
Last updated 18 hours ago
May 19 2010 | 11:07am ET
Despite growing concerns about the Greek debt crisis, hedge funds pushed ahead last month with broadly positive returns.
The Barclay Hedge Fund Index rose 1.31% in April (4.58% year-to-date), as most hedge funds shrugged off the sovereign debt questions. But they did hit close to home, with the Barclay European Equities Index adding just 0.05% on the month, compared to 1.57% for the Standard & Poor’s 500 Index.
“Rising fears of default in the Euro zone were a negative for European equity markets,” BarclayHedge founder Sol Waksman.
Distressed securities hedge funds led the way in April, adding 2.88% on the month—and 9.52% on the year.
“As investors have become more aggressive in their search for yield, prices for high-yield bonds have continued to increase at a faster rate than investment-grade bonds,” Waksman said. “It’s been an excellent environment for buyers of distressed securities.”
Convertible arbitrage funds rose 2.32% last month, equity long-bias 2.04%, event-driven 1.62% and fixed-income arbitrage 1.65%.
Just one of BarclayHedge’s 18 strategy indices lost ground last month, and it lost a lot of it.
“While most hedge fund strategies have been profitable over the past three months, short-sellers have been punished by broadly rising equity markets,” Waksman said. Short-bias funds lost an average of 5.87% in April, leaving it down 11.2% on the year.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…