The $3 trillion hedge-fund industry posted gains of 0.41% in April, according to the Greenwich Global Hedge Fund Index. Analyzing the data compiled by this index, the returns obtained in April are explained by the good performance of the global equity markets.
The best-performing strategies
Several strategies posted positive returns. So, let´s take a look at the return of different hedge funds based on the strategies they use.
Among the strategies with positive returns, we can find that the best-performing fund is the long-short equity strategies up by 1.55%. In the second place, we found the long-short credit, up by 1.29%; and in third place, the event-driven funds returned 1.27% in the month.
The worst-performing strategies
Global macro hedge funds make broad market bets on indices, currencies, commodities and other asset classes based on expectations about specific markets and asset classes. In particular, macro funds, which trade a range of assets to try to profit from macroeconomic trends, they performed better than their managed futures peers in April, returning an average of -0.48% during the month. Managed futures employ quantitative models to speculate in futures (commodities, equities, currencies, interest rates, etc). Although these funds provide the most diversification and hedging benefit of all the hedge fund strategies, they lost path against all the strategies. They posted a return in April of -1.57%. The other strategy which reported a loss was the Equity Market Neutral Index with -0.31%.
Year-to-date basis
On a YTD basis, we have made ”‹”‹this list where you can see the different returns:
| Strategy | YTD Return % |
| Long-Short Equity Index | 4.63 |
| Multi-Strategy Index | 3.19 |
| Long-Short Credit Index | 3.03 |
| Macro Index | 2.87 |
| Arbitrage Index | 2.78 |
| Event-Driven Index | 2.75 |
| Futures Index | 1.99 |
| Equity Market Neutral Index | 1.13 |
I would like to highlight two things. The first one is that the long-short equity continues to be the best performing during 2015. The other thing is that almost all the strategies have returned more than the SPDR S&P 500 ETF (SPY, Financial), which has a return of 2.64% since the beginning of the year.
Final comment
Hedge funds look particularly attractive for a diversifier investor. The fact that the hedge fund universe includes a wide variety of financial assets strategies makes it difficult for them to outperform in a bull market. Hedge funds have not been able to beat the market in the latest years. But according to the performance of April, we still believe that this would happen for the coming year, so we are not changing our outlook for 2015.
Disclosure: Omar Venerio holds no position in any stocks mentioned.
