Emerging Markets, Equity Strats Outperform In April

May 16 2008 | 10:57am ET

Hedge funds able to capitalize on last month’s stock market rally, along with those investing in emerging markets, topped their peers during a strong April for hedge funds, new figures from Hedge Fund Research show.

Equity hedge funds surged on the back of April’s market rally, which drove the Standard & Poor’s 500 Index up 4.87%. The HFRI Equity Hedge (Total) Index rose 2.59% (down 3.46% year-to-date), with quantitative directional and energy/basic materials funds returning 2.72% (down 2.8% YTD) and 2.16% (down 1.59% YTD), respectively.

Short-bias funds, unsurprisingly, did much less well, falling 3.1% in April. Those funds remain, on average, up 4.25% on the year.

Emerging market funds fared even better, with the HFRI Emerging Markets (Total) Index jumping 2.57%. Last year’s top-performing strategy remains down 4.82% in 2008. Asia ex-Japan funds rose 3.94% (they remain down 8.45% year-to-date), while Latin America funds added 3.22% to get back into the black year-to-date at 1%.

Overall, the HFRI Fund Weighted Composite Index added 1.65% last month, though it remains down 1.81% on the year. Funds of hedge funds rose 1.06%, and are down 3.15% year-to-date.

Relative value funds added 1.33% last month (down 2.17% YTD) and event-driven funds returned 1.08% in April (down 2.45% YTD). Macro was the only major strategy tracked by the HRFI indices in the red last month with a 0.15% loss, though it remains the only major strategy in positive ground on the year at 3.99%.

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