Hedge funds struggle in May amid recession fears
NEW YORK (Reuters) – Hedge funds posted adverse efficiency in Might, accentuating their losses this yr to virtually 3%, as traders positioned for a possible recession, a report by hedge fund information supplier HFR confirmed on Tuesday.
The fund weighted composite index went down 0.58% in Might, amid volatility in equities, bonds and commodities, HFR stated, with all funds classes within the adverse territory. Nonetheless, 40% of the hedge funds compiled posted beneficial properties.
Fairness hedge funds posted a lack of 8% within the first 5 months of the yr, the worst efficiency amongst hedge fund classes monitored by HFR. Nonetheless, they outperformed the S&P 500, which was down 12.76%.
Hedge funds that put money into growth-oriented sectors, similar to know-how and healthcare, have struggled this yr. Tiger World, one of many business’s largest companies, misplaced 14% in Might, leaving it down 52% for the yr, as an example.
“Hedge fund outperformance of U.S. equities continued in and thru the acute monetary market volatility in Might, with managers navigating not solely the continuation of the Russia/Ukraine battle, document vitality worth will increase, generational inflation and growing rates of interest, however with the extra issue of elevated chance of a shopper led U.S. financial recession,” acknowledged Kenneth Heinz, president of HFR.
Macro hedge funds, which guess on macroeconomics tendencies, gained 9.32% in the identical interval, regardless of a lack of 0.31% in Might.
Efficiency amongst hedge funds has been fairly divergent this yr. Whereas the highest decile of hedge funds posted a mean optimistic efficiency of 33.9% within the first 5 months of the yr, the underside was down 25.7%.
(Reporting by Carolina Mandl; Modifying by Lisa Shumaker)
