Hedge funds posted a negative performance in May, accentuating losses this year to nearly 3%, weighing investor positioning as they prepare for a potential recession. This is what the hedge fund data provider’s report shows, HFR (Hedge Fund Research).
Fund weighted composite index fell by 0,58% In May, due to volatility in the stock, bond and commodity markets, HFR said, with all fund categories in negative territory. However, the 40% of compiled hedge funds posted gains.
Equity hedge funds recorded a loss of8% in the first five months of the year, the worst performance among hedge fund categories monitored by HFR. However, they outperformed the S&P 500, which was down 12.76%.
Hedge funds investing in growth-oriented sectors, such as technology and healthcare, have had a tough time since the start of the year. Tiger Global (one of the major players in the industry), lost the 14% in Maygoing down the 52% for the year.
“The outperformance of hedge funds relative to US equity continued during and through the extreme volatility of financial markets in May, the managers navigated the continuation of the war in Ukraine, the record hikes in energy prices, inflation on the highs from 40 years and rising interest rates with the added factor of a greater likelihood of a consumer-led US economic downturn “he claims Kenneth HeinzPresident of HFR.
I macro hedge fundwho bet on the economic trend, gained 9.32% over the same period, despite a loss of 0.31% in May.
Performance among hedge funds has been quite divergent this year. While the top decile of hedge funds posted a positive average performance of 33.9% in the first five months of the year, the bottom decile fell by 25.7%.