Research

Hedge Fund Performance Commentary

Introduction

The Eurekahedge Hedge Fund Index gained 1.06% in April1 , after recording one of its strongest Q1 returns post-crisis. Hedge fund managers have recorded four consecutive months of positive performance since the beginning of 2019, supported by strength in the global equity and bond markets which resulted from encouraging economic data and accommodating central bank policies. On a year-to-date basis, hedge fund managers are up 5.15% as of April 2019. Positive earnings surprises helped renew investors’ optimism in the global equity market, which rallied 3.38% during the month as represented by the MSCI ACWI (Local). Optimism over the progress of the US-China trade talks helped bolster the equity markets around the globe over the first four months of the year, counterbalancing concerns over economic growth slowdown. However, recent development of the US-China negotiations pointed towards another escalation of the trade tension, with the US president announcing more tariffs in early May.

Approximately 72.3% of the hedge fund managers tracked by Eurekahedge posted positive returns in April, and 21.8% managed to generate double-digit gains year-to-date. Japanese and North American fund managers outperformed their peers focusing on other regions in April. The two mandates were up 1.37% and 1.36% respectively during the month. Looking at strategic mandates, long/short equities hedge funds were up 1.44%, trailing behind event driven hedge funds, which gained 1.73% over the month.

Figure 1: April 2019 and March 2019 returns across regions
 

Looking at year-to-date returns, Asia ex-Japan and North America mandates posted the strongest returns on the back of the respective regions’ equity market performance. The two mandates were up 7.87% and 6.73% respectively over the first four months of the year. Meanwhile, European funds lagged behind with 3.57% gain year-to-date.

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Footnote
1Based on 31.67% of funds which have reported April 2019 returns as at 9 May 2019 

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