Preqin: All-Strategies Hedge Fund Index Up 0.26% In May

Jun 14 2017 | 11:56pm ET

Almost all leading hedge fund strategies posted positive returns in May, according to new data from Preqin, as the industry recorded seventh consecutive month of gains.

Preqin’s All-Strategies Hedge Fund benchmark index returned 0.26% during the month, the company said, bringing year-to-date performance for the measure to 4.37%. Although May’s result was the lowest monthly return recorded in 2017 so far, hedge funds have booked just three months of losses since the start of 2016. 

Twelve-month returns for the industry are at 10.33%, Preqin added, which surpasses the expectations for hedge fund performance given to the company by investors at the start of the year. 

Key highlights from Preqin’s May Performance Report:

  • Multi-strategy and event driven strategies hedge funds posted the highest performance, with gains of 1.40% and 0.51% respectively. Relative value funds saw losses of 0.38%, the only leading strategy to lose ground in May. 

  • CTAs posted gains of 0.28% for the month, building on 0.43% returns seen in April. This takes YTD performance into positive territory for the first time in 2017, at 0.09%. 

  • UCITS funds saw gains of 0.43% in May, while alternative mutual funds saw marginal losses of 0.04%. In 2017 so far, they have now seen gains of 3.43% and 1.92% respectively. 

  • Funds of hedge funds returned 0.43%, maintaining momentum from 0.53% gains seen last month. Over the past 12 months, funds of hedge funds have now posted performance of 4.71%. 

  • North America-focused hedge funds posted losses of 0.22% for the month, while Europe- and Asia-Pacific- focused funds both made gains of 1.08%. However, over 12 months North America-focused funds have returned 11.44%, the highest of any region. 

  • Medium-sized hedge funds (($500-$999 million in AUM) posted the highest returns of any size classification, returning 0.80% in May. They also overtake emerging hedge funds to post the highest 12-month performance, returning 10.94%. 

“Hedge fund performance has continued to make ground in May, despite some concerns about slowing growth in the U.S. and Europe,” said Amy Bensted, Preqin’s head of hedge fund products. “There have only been three months since the start of 2016 in which hedge funds saw losses, and this should bolster investor confidence in the asset class. 

“At the end of H1 2016, hedge fund investors reported that they did not broadly expect hedge fund performance to improve in the next 12 months: however, since then the industry performance has reached double figures for the period,” she added. “There are also positive signs of sustained momentum in other areas of the industry. CTAs have posted their first back-to-back gains since November-December 2016, while funds of hedge funds are seeing their longest period of positive performance since May 2015.” 

Founded in 2003, Preqin is a leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. The company's Hedge Fund Online service is a leading source of intelligence on the hedge fund industry, with performance information for over 16,000 hedge funds across strategies and geographies. More than 47,000 professionals in 90 nations use the company’s products. 

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