Hedge funds down 1.88% in May
Hedge funds were down 1.88% on average in May – a month that sawglobal markets shed significant value. However, the hedge fund sector’syear-to-date performance remains in the black, with the EurekahedgeHedge Fund Index advancing 1.30% May YTD. In comparison, the MSCIWorld Index was down 9.91% in May, standing at -7.64% for the year sofar.
Hedge funds were up 1.30% YTD (May 2010), outperformingglobal markets by 8.94% YTD.
Distressed debt hedge funds added a 14th consecutive positivemonth, gaining 50.91% over this period.
The first five months of the year saw nearly 220 fund launchesacross the globe.
Index May 2010Est
2010 YTDReturns 2009Returns Eurekahedge Hedge Fund Index-1.881.30 19.72Eurekahedge Fund of Funds Index-2.42 -0.339.71Eurekahedge Long-Only AbsoluteReturn Fund Index-7.14 -1.0447.87Eurekahedge Islamic Fund Index-4.56 -0.8621.53
May turned out to be a tough month for global markets as they were hitby a series of bad news. The ‘flash crash’ of US markets on 6 May was anominous sign at the start of the month, followed by sudden dips in theAsian markets a few days later. The continuing sovereign debt problemsin the eurozone, the major oil spill in the Gulf of Mexico, fears of aconflict in Korea and the unrest in Thailand all contributed to heightenedvolatility in global markets and affected the already fragile marketsentiment.Hedge funds across all regional mandates ended the month in negativeterritory; however, managers of all regional mandates beat theirrespective underlying market indices. In absolute terms, Latin Americanand North American managers were the best performers for the month(in the sense of losing the least), down 0.87% and 0.92%, respectively,while the Bovespa was down 6.64% and S&P 500 lost 8.2%. In relative