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FAIRFIELD, IOWA MAY 12, 2022
The hedge fund industry gave up ground in April, down -2.66% for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions.
For the year to date interval, the hedge fund industry remained underwater with a compounded return of -5.55% through April.
By way of comparison, the S&P 500 Total Return Index shed -8.72% in April. The absorption of the month’s steep loss pushed the index further into the red, landing its year-to-date compounded return at -12.92%.
A sizable majority of hedge fund subsectors posted losses in April. The sectors that did post monthly gains were led by the Emerging Markets Eastern Europe Index which bounced +4.97%. Other notable sectors were represented by the Volatility Trading Index +1.33%, the Distressed Securities Index +1.05%, the Emerging Markets Eastern European Equities Index +0.86%, the Equity Market Neutral Index +0.78%, the Global Macro Index +0.74% and the Emerging Markets MENA Index up +0.46%.
Hedge fund subsectors suffering the most cutting losses in April were the Healthcare & Biotechnology Index off -7.16% and the Technology Index down -6.01%, but there was no shortage of pain to go around. Losses of -4% or greater dogged more than half-a-dozen industry sectors, including: The Emerging Markets Global Fixed Income Index (-5.88%), the Emerging Markets Latin American Equities Index (-5.52%), the Event Driven Index (-4.36%), the Equity Long Bias Index (-4.25%), the Balanced (Stocks & Bonds) Index (-4.19%).
April saw mostly a continuation of the unhappy trends established throughout Q1 2022. Correspondingly, 3 out of 4 hedge fund subsectors are carrying aggregate losses for the year-to-date interval ending April 30th. The sectors that have so far managed to avoid 2022’s mire were led by the Global Macro Index which has posted a compounded return of +7.83%. The Emerging Markets MENA Index was the first runner up with +6.09% to-date performance. Other sectors in the black included: The Emerging Markets Latin American Equities Index (+4.35%), the Emerging Markets Latin America Index (+2.02%), the Equity Market Neutral Index (+1.65%), the Distressed Securities Index (+0.98%), the Emerging Markets Sub Saharan Africa Index (+0.26%), and the European Equities Index (+0.16%).
Subsectors reporting year-to-date losses were headlined (perhaps unsurprisingly) by sectors focused on Eastern Europe. The Emerging Markets Eastern European Equities Index and the Emerging Markets Eastern Europe Index were down -30.87% and -22.30% respectively. Technology-focused sectors are similarly downtrodden (if not as extremely). The Technology Index and the Healthcare & Biotechnology Index reported compounded returns of -16.55% and -14.96% respectively.
Following April, nearly 1/3 of the hedge fund subsectors were underwater by -10% or more. These include: The Emerging Markets Asian Equities Index (-12.81%), the Emerging Markets Global Fixed Income Index (-11.72%), the Emerging Markets Asia Index (-11.34%), the Emerging Markets Global Equities Index (-10.43%) and the Emerging Markets Global Index (-10.14%).
“Simply put, April was a tough month for most investors and asset managers,” said Ben Crawford, Head of Research at BarclayHedge. “Most risk assets are in a bearish trend and there doesn’t seem to be an abundance of safe harbors. One doesn’t require a grand leap of imagination to see why. With investors worried about inflation, interest rate hikes and a slowing economy, the S&P 500 had its worst month since the start of the COVID-19 pandemic. U.S. inflation hit its highest level since 1981 in the first quarter, inflation in the UK hit a 30-year high in March and annual inflation hit record levels in April in the Eurozone.”
For a complete table of BarclayHedge Hedge Fund and Sub-Index results for April, as well as historical returns, click here.
About Backstop Solutions
Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds and real estate investment firms.
BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 hedge funds, funds of funds and CTAs. The BarclayHedge Indices are utilized by institutional investors, brokerage firms and private banks worldwide as performance benchmarks for the hedge fund and managed futures industries.
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Janet Falk
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