May figures from Eurekahedge show hedge funds outperforming NASDAQ and S&P 500
The latest May report from Eurekahedge With Intelligence reveals that hedge fund managers were down 0.72 per cent in April, outperforming the tech-heavy NASDAQ and S&P 500 by 12.54 per cent and 8.08 per cent respectively.
Around 80.1 per cent of global hedge funds have outperformed the S&P 500, while 44.4 per cent of them have generated positive returns in April. On a year-to-date basis, global hedge funds are down -1.83 per cent, outperforming the S&P 500 which returned -13.31 per cent over the same period.
The firm writes that in terms of asset flow, global hedge funds posted net investor redemptions of USD50 billion partially offset by performance-based growth of USD6.9 billion over the first four months of 2022.
CTA/managed futures, macro and multi-strategy were the top positive contributors over the period as they reported accumulated performance-based gains of USD61.9 billion as of April 2022, offset by performance-based losses of USD39.4 billion incurred by the long/short equities strategy over the same period.
On an asset-weighted basis, hedge funds were down 0.71 per cent in April, as captured by the Eurekahedge Asset Weighted Index – USD, slightly outperforming its equal-weighted counterpart by 0.01 per cent. On a year-to-date basis, the Eurekahedge Asset Weighted Index – USD was down 1.07 per cent over the first four months of the year.
The ability of large size hedge funds to diversify their assets has paid off in this challenging period as they have outperformed their smaller peers, with the billion dollar and large-size hedge funds returning 0.18 per cent and -0.07 per cent in April respectively, while their medium and small-size counterparts posted relatively larger losses of -0.92 per cent and -1.04 per cent respectively.
In terms of year-to-date returns, the Eurekahedge Billion Dollar Hedge Fund Index was up 0.54 per cent, outperforming their medium and small-size peers which posted losses of -2.08 per cent and -2.26 per cent respectively.
The Eurekahedge European Hedge Fund Index was down 0.46 per cent in April, outperforming the DAX Index by 1.74 per cent during the month. European equities reported smaller losses compared to their US counterparts, supported by strong corporate earnings in the region and the relatively less hawkish ECB monetary policy stance than was expected by the market. In terms of year-to-date return, European hedge funds were down 4.49 per cent as of April 2022, with around 40 per cent of them maintaining a positive performance over the first four months of the year.
The Eurekahedge Multi-Strategy Hedge Fund Index was down 0.61 per cent in April, bringing its year-to-date return to -0.49 per cent over the first four months of 2022. In terms of their asset flow, multi-strategy hedge funds were the most consistent amidst the heightened market volatility as they recorded their fifth consecutive month of performance-based growth. In April, multi-strategy fund managers reported performance-based gains of USD8.0 billion, while accumulating a performance-based growth of USD20.9 billion throughout the year.
The Eurekahedge North American Hedge Fund Index was down 1.74 per cent in April, outperforming the S&P 500 by 7.06 per cent during the month. In a bid to curb rising inflationary pressures, the Federal Reserve has raised their policy rate by 50bps in May and expects to conduct further rate hikes in the coming months, leading to increased bearish sentiment in the region. On a year-to-date basis, North American hedge funds were down -3.27 per cent, with its underlying long/short equities sub-mandate posting -7.02 per cent of losses over the first four months of the year.
The Eurekahedge CTA/Managed Futures Hedge Fund Index was up 2.93 per cent in April, posting its fifth consecutive month of positive performance and best 5-month run since 2011, with an accumulated return of 10.17 per cent since end-December 2021. Fund managers benefited from higher commodity prices particularly in energy and agriculture, driven by supply chain bottlenecks caused by the ongoing geopolitical conflict. On a year-to-date basis, CTA/managed futures managers were up 9.40 per cent over the first four months of 2022, with around a quarter of them generating a return more than 20 per cent.
The Eurekahedge Long Short Equities Hedge Fund Index was down -2.29 per cent in April, bringing its year-to-date return to -5.89 per cent as of April 2022. The hawkish Federal Reserve, higher commodity prices and lockdowns in China have contributed to the weak performance of the global equity markets during the month. Around 38 per cent of long/short equities hedge funds have maintained a positive performance in April, while 10 per cent of them have generated a double-digit return in 2022.
Fund managers focusing on cryptocurrencies as represented by the Eurekahedge Crypto-Currency Hedge Fund Index declined 12.87 per cent in April, bringing their year-to-date return to -20.28 per cent. Similar with other risk asset classes, the market turmoil has also impacted the cryptocurrency market. Bitcoin was down -18.01 per cent in April, and as at the time of writing is currently trading below USD30,000, sharply lower than its all-time high of around USD65,000.