BOSTON (Reuters) – Global hedge funds posted their greatest month-to-month acquire in additional than a decade in April when shares rocketed increased with the assistance of presidency rescue packages designed to gas progress stalled by the coronavirus outbreak, in line with new knowledge on Thursday.
The HFRI Fund Weighted Composite Index climbed 4.8% final month, marking its greatest exhibiting since May 2009 when it gained 5.15% on the tail finish of the monetary disaster, analysis agency Hedge Fund Research mentioned.
Managers that target shares, guess on company occasions, and interact in activism by pushing administration to carry out higher delivered the business’s greatest features in a month that noticed the Standard & Poor’s 500 index acquire 12.81%, HFR knowledge exhibits.
Still, April’s returns weren’t sufficient to erase three months of losses, together with an 8.42% drop in March, and the typical hedge fund stays within the pink for the yr with a mean lack of 6.6%, the info exhibits. The S&P 500 index is off 9.28% within the first fourth months of 2020.
The distinction between winners and losers was giant final month, HFR mentioned. It famous that the highest decile of managers who submit their knowledge to the agency gained 19.7% whereas the underside decile fell 4.1%, representing a dispersion of 23.Eight proportion factors.
Big market swings, together with the drop in oil costs, helped hedge funds in April, HFR President Ken Heinz mentioned in an announcement.
An unsure outlook for the months forward, as unemployment soars and sure sectors return to enterprise after weeks of lockdown, might create “dynamic opportunities for managers to generate outperformance through the remainder of the year,” Heinz added.
Hedge funds usually promise to guard capital from sharp market swings, however traders nonetheless get chilly toes. They pulled $33 billion out of the hedge fund market as efficiency sagged within the first three months of the yr, marking the largest quarterly outflows in additional than a decade, the HFR knowledge exhibits.
Reporting by Svea Herbst-Bayliss; Editing by Tom Brown