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Hedge funds rally in April, but YTD still bleed red

New data has revealed that hedge funds around the globe staged a recovery in April, with a positive aggregate return of more than 5%.

It follows a disappointing March, with almost all the hedge funds tracked by a global database and analytics tool in the red.

Despite this promising turn around, eVestment found that the majority of hedge funds were still in the red year to date, reflecting the devastating impact of the coronavirus pandemic on market performance.

Since the beginning of the year, aggregate industry returns stood at -7.49%, eVestment said.

According to eVestment global head of research Peter Laurelli, the gains in April were generally the greatest among strategies that had the lowest average returns for the year.

"For instance, Event Driven-Activist funds saw the highest returns among the primary fund strategies eVestment tracks, at +10.73%, but are posting YTD returns of -16.76%," the database said.

"Similarly, India-focused hedge funds posted strong returns of +11.89% in April, but are in the red at -17.67% for the year."

Other performance winners in April were long/short equity funds and origination and financing funds, which saw returns of 7.95% and 7.21% respectively, eVestment said.

"Long/short equity funds are still in the red YTD, at -9.13%, but origination & financing funds are at +3.21% returns YTD," it said.

Commodity-focused funds barely made positive returns in April, eVestment said, returning 0.32% during the month. However, they are one of the biggest performance losers for the year, the database found, losing 12.03% since December 31.

Similarly, emerging markets-focused funds returned 6.17% during the month, however, since the beginning of the year are down 11.09%. Developed markets funds were up 5.97% in April, but down 7.7% since December 31.

Interestingly, a discretionary approach (+6.42%) proved to be more effective than its systematic counterpart (+0.96%). Since the beginning of the year, both strategies are down 8.41% and 3.3% respectively.

Read more: hedge fundseVestmentPeter Laurelli
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