Hedge funds posted gains for the seventh-straight month in May, according to data from Hedge Fund Research.
The HFRI Fund Weighted Composite Index gained 0.54% last month and is up 4.92% on the year. But the benchmark also maintained a more dubious streak: underperforming the Standard & Poor's 500 Index, which rose more than 2% last month and is up about 16% on the year.
Equity hedge funds were the strongest major strategy in May, rising 1.78% (7.32% year-to-date). Event-driven funds returned an average of 1.71% on the month (6.66% YTD), emerging markets funds 0.27% (3.61% YTD) and relative-value funds 0.06% (4.11% YTD). Macro funds gave back 1.54% in May (up 0.55% YTD).
Technology and healthcare was the strongest sub-strategy index last month, jumping 2.44% (8.67% YTD). Asia ex-Japan rose 2.27% (7.41% YTD), convertible arbitrage 1.87% (5.55% YTD), distressed and restructuring 1.66% (7.81% YTD), multi-strategy relative-value 1.66% (6.41% YTD) and quantitative directional 1.14% (6.23% YTD). Merger arbitrage funds gained an average 0.7% (1.9% YTD) and equity market neutral funds 0.55% (3.17% YTD).
Amidst the continuing market rally, short-bias funds took a big hit, falling 3.24% (down 9.75% YTD). Systematic diversified dropped 2.22% (up 1.22% YTD), Latin America 2.14% (down 0.31% YTD), Russia and Eastern Europe 1.26% (down 0.67% YTD), corporate credit 1.09% (up 2.11% YTD), asset-backed 0.54% (up 4.24% YTD) and energy and basic materials 0.04% (down 1.82% YTD).
Funds of hedge funds rose an average of 0.7% on the month, according to the HFRI Fund of Funds Composite Index, and are up 4.84% on the year.