Key Takeaways
- • The Hedge Fund Research Inc. Fund Weighted Composite Index gained 1.64% in April, recovering roughly half of March's 2.14% decline, though year-to-date performance remains negative at -1.78%.
- • Technology/Health Care, Emerging Markets, and Equity Hedge strategies led the rebound with gains of 4.06%, 3.54%, and 3.08% respectively, demonstrating sector-specific strength during the recovery.
- • Five of six hedge fund strategies tracked by Dow Jones Hedge Fund indexes posted net-of-fees gains in April, with Equity Long/Short returning 3.54% and Event Driven returning 2.6%, while Convertible Arbitrage posted the only losses at -1.95%.
- • The Hennessee Hedge Fund Index advanced 2.2% in April and climbed to -1.8% year-to-date; the SS&C GlobeOp Hedge Fund Performance Index measured 3.74% for the month, with year-to-date performance reaching 4.1%.
- • Hedge fund performance lagged broad equity markets in April, as the S&P 500 advanced 4.8%, the Dow Jones Industrial Average increased 4.5%, and the Nasdaq Composite advanced 5.9%.
Summary
Hedge funds rebounded sharply in April following a difficult March, with industry-wide indices posting meaningful gains across multiple tracking systems. The Hedge Fund Research Inc. Fund Weighted Composite Index gained 1.64% during the month, recovering approximately half of the previous month's 2.14% decline. According to Ken Heinz, president of Hedge Fund Research, "The hedge fund industry recovered half its losses from the first quarter in April." Despite the monthly rebound, year-to-date performance remains challenged at -1.78%, reflecting the cumulative impact of first-quarter headwinds.
The April recovery was broadly distributed across strategies and asset classes. The HFR Technology/Health Care index led performance with a 4.06% gain, followed by Emerging Markets at 3.54% and Equity Hedge at 3.08%. The Hennessee Hedge Fund Index, compiled by Hennessee Group LLC, advanced 2.2% in April and improved its year-to-date standing to -1.8%. The Dow Jones suite of hedge fund indexes showed similar strength, with five of six tracked strategies posting net-of-fees gains. Equity Long/Short delivered the strongest absolute return at 3.54%, while Event Driven contributed 2.6%. Convertible Arbitrage was the lone underperformer, declining 1.95%.
While hedge fund performance improved considerably, the industry continued to lag broader equity market gains. The S&P 500 advanced 4.8%, the Dow Jones Industrial Average rose 4.5%, and the Nasdaq Composite surged 5.9% during April. The disparity highlights that while hedge funds successfully recovered from March losses, they did not match the strength of equity-market rallies. Additional data indicated that hedge funds administering significant assets achieved stronger results—according to Citco, which administers $1.3 trillion in hedge fund assets, the average fund returned 5.6% in April, with nearly nine in ten funds finishing the month in positive territory.
The April recovery was broadly distributed across strategies and asset classes. The HFR Technology/Health Care index led performance with a 4.06% gain, followed by Emerging Markets at 3.54% and Equity Hedge at 3.08%. The Hennessee Hedge Fund Index, compiled by Hennessee Group LLC, advanced 2.2% in April and improved its year-to-date standing to -1.8%. The Dow Jones suite of hedge fund indexes showed similar strength, with five of six tracked strategies posting net-of-fees gains. Equity Long/Short delivered the strongest absolute return at 3.54%, while Event Driven contributed 2.6%. Convertible Arbitrage was the lone underperformer, declining 1.95%.
While hedge fund performance improved considerably, the industry continued to lag broader equity market gains. The S&P 500 advanced 4.8%, the Dow Jones Industrial Average rose 4.5%, and the Nasdaq Composite surged 5.9% during April. The disparity highlights that while hedge funds successfully recovered from March losses, they did not match the strength of equity-market rallies. Additional data indicated that hedge funds administering significant assets achieved stronger results—according to Citco, which administers $1.3 trillion in hedge fund assets, the average fund returned 5.6% in April, with nearly nine in ten funds finishing the month in positive territory.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.