Hedge Funds Continue Rally In April

May 15 2007 | 2:25pm ET

Hedge funds did well in April, according to the Credit Suisse/Tremont Hedge Fund Index, but only about half as well as the broader equity markets. The CS/Tremont index rose 2.02% last month and has gained 5.43% year-to-date, but the Standard & Poor’s 500 has closed the gap, soaring 4.43% in April to reach 5.1% in 2007. Investable funds rose 1.68% on the month (4.02% YTD).

“Overall, this market environment has been favorable for the majority of hedge fund strategies,” Oliver Schupp, president of Credit Suisse Index Co., said. “Managed futures, in particular, was up 4.02% in April as managers generally profited from currencies as the U.S. dollar and Japanese yen weakened and the euro strengthened.”

The strategy may have had a good month—it was even better among investable funds, which rose 4.44%—but it has still been a pretty dismal year, with managed futures remaining down 0.87% year-to-date (investable managed futures funds are down 1.71% year-to-date).

Unsurprisingly, with global equity markets on a tear, funds with big short portfolios suffered in April. Dedicated short-bias funds tumbled 2.74% in April (down 1.14% YTD); investable short funds did even worse (down 3.33% on the month and 2.34% YTD). But all other strategies tracked by CS were in positive territory.

Other than managed futures, the best performers included long/short equity (up 2.9% in April, 6.79% YTD), emerging markets (2.24%, 5.51% YTD) and risk arbitrage (2.15%, 4.87% YTD). Event-driven strategies remain the best performers in 2007 (1.52%, 6.55% YTD), especially event-driven multi-strategy, which added 1.44% in April and is up a robust 7.12% this year.


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