May Flowers: Hedge Fund Post Best Month In Nine Years

Jun 8 2009 | 1:10am ET

Harking back to better days in these troubled times, Hedge Fund Research said that May was the industry’s best month in more than nine years.

The HFRI Fund Weighted Composite Index surged 5.23% last month, its best single-month return since February 2000. The average hedge fund is up 9.43% year-to-date, just five months after ending one of their worst years in history, with an average loss of nearly 20%.

All of the HFRI strategy and substrategy indices were in positive ground last month; the worst performer, private issue and Regulation D funds, still managed a 0.37%. And only three substrategies—notably short bias funds, which, battered by the stock market rally, have lost 6.11% this year—are in the red through the first five months.

“After historical lows in 2008, risk appetite has quickly returned over the last eight weeks, suggesting that hedge fund investors are again looking past month-to-month volatility and focusing on the longer-term performance merits of the industry,” said Kenneth Heinz, president of HFR. “Following a period of consolidation, we expect industry growth to resume in the coming quarters, with an emphasis on transparent investment by institutional investors.”

Emerging markets funds—last year’s worst-performing strategy—continued their strong pace in May, rising an average of 9.74%. Russia and Eastern Europe funds and Asia ex-Japan funds did especially well on the month, soaring 13.27% (23.25% year-to-date) and 10.85% (19.46% YTD), respectively.

Equity hedge funds also posted a strong month, rising 7.09% (12.55% YTD). Stock funds were led by energy and basic materials funds, which rose 9.64% (22.66% YTD), and technology and healthcare funds, which added 6.78% (12.91% YTD).

Rounding out the major strategies, event-driven funds finished May with an average return of 4.19% (7.7% YTD), relative value funds jumped 3.73% (11.17% YTD) and macro funds added 3.01% (2.09% YTD).

Funds of hedge funds did a good deal less well, returning 3.25% to end May up 4.76% on the year.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The profitable power of confluence

The trading world is inundated with strategies and techniques. Here’s one way traders can get a handle on information overload.

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.