April saw hedge funds posting positive returns with most markets trending upwards during the month.
In its Index Press Release published today by Eurekahedge, it highlighted its index was up 1.09 percent during April, while the MSCI World Index appreciated 2.02 percent in April.
What can past market crashes teach us about the current one?
The markets have largely recovered since the March selloff, but most would agree we're not out of the woods yet. The COVID-19 pandemic isn't close to being over, so it seems that volatility is here to stay, at least until the pandemic becomes less severe. Q2 2020 hedge fund letters, conferences and more At the Read More
Japanese Hedge Funds Positive Returns
Some of the key takeaways highlighted by Eurekahedge include Japanese hedge funds witnessing strongest April and 4-months on record returns, by appreciating 4.22 percent and 15.87 percent respectively. Besides Asia, ex-Japan hedge funds also outperformed underlying markets for second consecutive month. According to today’s press release from Eurekahedge, distressed debt funds also extended their winning streak to 10 months, gaining 23 percent since July 2012.
The press release elaborates by highlighting the start of April witnessed some profit taking from the equity markets and some disappointing global economic data. The S&P 500 initially dipped below the 1550 mark by mid-April aided by less anticipated news of Chinese growth hitting global markets. With positive economic data emanating from the U.S. and installation of new Government in Europe, the market started reviving during this earning season.
Japanese managers posted the strongest returns for yet another month. The Eurekahedge Japan Hedge Fund Index was up 4.22 percent in April, bringing its year-to-date return to 15.87 percent. This extended their winning run to eight consecutive months – making it the longest winning streak on record for Japanese funds.
The press release throws further light on Asia’s strong performance. Asia ex-Japan managers also delivered positive returns in April with gains of 2.37 percent, outperforming the underlying markets for the second consecutive month. Further the MSCI Asia ex-Japan Index was up 1.87 percent during the month.
Managers investing in India witnessed the strongest returns with an average gain of 6.60 percent in April. North American managers posted returns of 0.76 percent in April as the market witnessed some trend reversals during the month, with the S&P 500 increased by 1.81 percent in April.
All strategic mandates (excluding relative value funds) finished April with positive returns, with the strongest gains posted by CTA/managed futures and distressed debt.
Another researcher of global hedge fund industry, Hedge Fund Research, also echoes the same view. According to HFR, hedge funds posted gains for the sixth consecutive month in April, as trend following, quantitative Macro strategies successfully navigated the dramatic sell off in gold and other commodities. Further investors increased allocations to Asian hedge funds in 1Q13 as stimulus measures, quantitative easing and increased bond purchases by the Bank of Japan drove gains across both Japanese equities and the HFRX Japan Index.