Hedge Funds Post Best Month in Six Years, Led by Equities

(Bloomberg) -- Hedge funds rose 4.2% in April, the most in data going back to January 2014, as U.S. stocks rebounded to their best return in more than 30 years.

Equity managers led the gains, posting a 6.5% advance in the month, according to preliminary figures from the Bloomberg Hedge Fund Indices.

So far this year, hedge funds have held up better than the stock market. The industry was down 6.7% through April, compared with a drop of about 9% the S&P 500 Index, including reinvested dividends, as the coronavirus crisis rocked global markets. Equities were less volatile in April, with the S&P 500 jumping almost 13% -- its best month since 1987.

Hedge Fund Research Inc. also reported Thursday that funds jumped about 4% in April, the strongest monthly gain in more than a decade. For the year, the industry is down 7.4% on an asset-weighted basis, the HFR data show.

“Managers are actively positioning for both continued, high realized volatility as well as the expanded opportunity set for long-short investing, encompassing trading through the current pandemic conditions and adjusting for the post pandemic environment,” HFR President Kenneth Heinz said in the report. “It is likely that the state of macroeconomic trading and investing will remain volatile and fluid in coming months, creating dynamic opportunities for managers to generate outperformance through the remainder of the year.”

All of the five main strategies tracked by Bloomberg rose in April. Here’s a look at the figures:

Bloomberg Hedge Fund Indices are based on funds reporting to the Bloomberg Hedge Fund Database.

Read more on how hedge funds are faring.

For more data on hedge funds

• See HFND and select option 3 for the Bloomberg Hedge Fund Database Snapshot, which offers more details on fund performance
• See HFS to screen for specific hedge funds

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