Widespread Losses Push Hedge Funds Down 0.54%

Jun 9 2011 | 2:19pm ET

Hedge funds were covered in red in May, with almost all strategies posting losses on the month, data from the Hennessee Group shows.

The Hennessee Hedge Fund Index lost 0.54% on the month, its first down month of the year. The index remains up 2.86% year-to-date.

"Most hedge funds lost money in May as risk assets experienced a sharp reversal due to concerns about the global economic recovery.  Commodities took the biggest hit, with silver declining 21% and oil falling 10% during the month,” Lee Hennessee said. “Hedge funds were positioned defensively, which allowed them to protect capital during the sell off.  Several managers used the sell off to add to high conviction core positions and reduce higher beta names."

Only six of the 26 strategies and substrategies tracked by Hennessee were in the black in May, led by healthcare and biotechnologies funds, up 1.77% (7% year-to-date) and short-biased funds, up 1.67% in May but still down 4.88% in a year that has seen the Standard & Poor's 500 Index rise almost 8%. Latin America funds rose 0.83% (down 0.08% YTD), technology funds 0.53% (5.55% YTD) and opportunistic funds 0.11% (2.9% YTD). Merger arbitrage funds were flat on the month (3.37% YTD).

That's all of the good news. Among major strategies, the closest any got to winning was long/short equity, down just 0.09% (up 4.01% YTD). Arbitrage and event-driven funds lost 0.71% (up 2.69% YTD) and global/macro funds 1.16% (up 0.46% YTD).

No strategy had a more miserable May than private investments in public equities and private financing funds, which lost 4.71% on the month to wipe out their year-to-date gains, leaving them down an average of 1.14%. Other prominent losers included macro funds (down 1.95% in May, down 1.42% YTD), international funds (down 1.55%, up 1.32% YTD), telecommunications and media funds (down 1.42%, up 4.85% YTD) and growth funds (down 1.11%, up 4.51% YTD).

On the bright side, despite all of the bloodletting, only five strategies are down on the year.


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

The yield curve and stock market response

Traders form habits quickly. Understanding these and their effects can better equip us to decipher actual market moves.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.