ValueWalk – Hedge funds had a decent time in May. During the month, all major strategies showed a positive return except for managed futures. The monthly report from eVestment found that the average return of a hedge fund was 1.23% in May, bringing up average returns for the 5-month period to 2.2%.
Activist hedge funds grab highest return since Jan 2013
Of particular note were activist hedge funds, which generated their highest gain since January of last year. The event-driven activist hedge funds followed by eVestment were up 3.92% on average in May, thus managing a 4.5% return YTD. These hedge funds caught a break in May after a run of lackluster performance in 2014. Activists had won the highest returns in 2013 as well, with names like Larry Robbins’ Glenview, Nelson Peltz’ Trian Fund Management and Dan Loeb’s Third Point adorning the best-performing list of hedge funds last year. According to eVestment, activist hedge funds are up 15% over a 12-month period and have generated the most volatile returns in 2014 across all strategies.
Credit and India-focused hedge funds in the green
Credit hedge funds have been having a great run this year as well. With treasury yields on a consistent decline, this strategy has made its ninth consecutive month of positive returns. Credit was up 1.03% in May and has gained 3.9% for the year. Meanwhile distressed funds were up by the same number in May and are now sitting on a 4.75% return for the year. The report noted that large managed futures funds gained, whereas their smaller counterparts lost in May. On a regional comparison, India-focused funds have returned an unprecedented 17.5% YTD.