May 2011 Preliminary Report: Distressed Debt Hedge Funds Take The Lead

New York ( –  Trend-following strategies were the most successful as the markets’ movements were positive at the start of the month and ended with a sharp upturn, according to the May 2011 Eurekahedge Preliminary Report.

All strategies delivered positive returns in April, led by distressed debt funds, who continued their winning streak, bringing their year-to-date April returns to 5.44% — the best amongst all strategic mandates.

CTA/managed futures funds came in second, up 3.73% during the month. Trend following strategies were successful during the month, generating excellent returns for several managers.

Highlights for April include:

– Hedge funds up for the 10th consecutive month, gaining 1.73% in April and 2.99% YTD.
– Early reporting funds indicate strong inflows for April reaching almost $10bn.
– Net flows in the first four months now exceed total net flows for whole of 2010 ($73.2bn April 2011 YTD vs. $66bn in 2010).
– CTA/managed futures funds gain 3.73% in April, AUM reaches new record high of $213.6 billion.
– Large hedge funds outperforming smaller hedge funds in 2011.

North American and European hedge funds also witnessed healthy returns, gaining 1.50% and 0.97% in April. The month started off with positive movements in the markets, however the trend reversed mid-month after the announcement of S&P’s revised outlook on US sovereign debt. Markets rebounded on the back of strong corporate earnings announcements and expectations of continued low interest rate in the US as well as the successful placement of European government bonds —  the S&P500 was up 2.61% in April while the MSCI Europe Index gained 2.64%

Editing by Alex Akesson
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