New York (HedgeCo.Net) – The HFRX Global Hedge Fund index reports that hedge funds were up 0.7% for May and 4.6% year-to-date.
Equity markets posted gains for the month despite paring gains in a late-month sell off as government bond yields rose on improving US economic data and expectations for a reduction of bond purchase stimulus measures by the Federal Reserve.
US equities led gains for May, with positive contributions across all market capitalizations with sector leadership from Technology, Financials, Cyclicals and Healthcare. European equities also posted strong gains, led by Germany, with contributions from the Netherlands, Italy, France and the UK. Asian equities were mixed as the Nikkei experienced a sharp intra-month reversal, ending the month with a narrow decline; China, India and Korea also gained while Australia and Hong Kong declined.
Emerging Markets equities declined, with weakness concentrated in both Russian and Latin America. Bond yields rose with US 10 year bond yields rising nearly 50 bps for the month, yields also rose across UK Gilts, France, German Bunds, Italy, Spain, Switzerland and Japan, while Greek bond yields fell sharply on improved fiscal outlook and austerity measures; investment grade credit widened while volatility rose for the month.
The US dollar posted strong gains across most currencies, eclipsing a 4 year high of 100 against the Japanese Yen; the Dollar also gained against the British Pound, Euro, Swiss Franc, Australian Dollar and South African Rand. Declines continued across most commodities led by Gold, Silver, Oil, Natural Gas, Lumber, Cotton and Sugar.
Hedge funds posted gains for the 7th consecutive month and 10th in the last 11 months, with the HFRX Global Hedge Fund Index gaining +0.75% and the HFRX Equal Weighted Strategies Index posting a gain of +0.98% for May; Equity Hedge completed 12 consecutive months of gains for the first time since inception of the index.