Hedge Funds Shed 2.26% Amidst Sovereign Worries

Jun 8 2010 | 5:12pm ET

May was the worst month for hedge funds in a year and a half, according to Hedge Fund Research.

The average fund fell 2.26% last month, the HFRI Fund Weighted Composite Index shows, slashing its year-to-date gain to 1.28%. Just three of the 23 strategies and substrategies traced by the HFRI indices were in the black in May, including short-bias funds, which soared 6.99% (down 4.37% year-to-date), no surprise given that the Standard & Poor’s 500 Index plummeted nearly 8%.

It was the worst month for hedge funds since November 2008, at the height of the financial crisis.

“Hedge funds were broadly impacted by the sharp increase in risk aversion associated directly with the sovereign bond crisis escalation, as well as the effects this situation has had on global equity markets, corporate fixed income and currency markets,” HFR said.

Given the international scope of the sovereign crisis, emerging markets funds were especially hard-hit, dropping an average of 6% (down 1.46% YTD). Russia and Eastern Europe funds fell 9.98% (up 0.8% YTD), while Asia ex-Japan funds lost 5.67% (down 3.14% YTD) and Latin America funds 5.32% (down 5.47% YTD).

Energy and basic materials funds lost 4.17% (down 0.72% YTD, equity hedge funds 3.69% (up 0.29% YTD), technology and healthcare funds 2.82% (up 0.34% YTD) and distressed and restructuring funds 2.76% (up 4.28% YTD).

Joining short-sellers on the winning side were asset-backed fixed-income funds (up 1.08% in May, up 6.73% YTD) and equity market neutral funds, which lived up to their billing by adding 0.23% (up 0.96% YTD).

Funds of hedge funds lost 2.84% on the month and are down 0.55% YTD.


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    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…

Publisher's Note