Highest in almost three years
Hedge Funds climbed 1.4
percent in April to the highest level in almost three years as stock markets
rallied amid rising earnings and the Federal Reserve renewed
its pledge to stimulate growth with low interest rates.
The Bloomberg aggregate hedge-fund index
rose to 127.99 from 126.21, reaching a mark not topped since June 2008 and bringing
this year’s gain to 3.7 percent. Funds betting on global economic trends,
long-short stock funds and multistrategy funds advanced.
“The average investor is becoming more and
more positive on hedge funds,” said Don Steinbrugge, managing partner of Agecroft
Partners LLC, a Richmond, Virginia-based firm that advises hedge funds and
The MSCI World Index of global stocks rallied 4.3 percent in April, including
dividends, as higher-than-estimated profits from Apple Inc, Morgan Stanley and 3M Co. lifted markets. Fed Chairman Ben S.
Bernanke said last month the U.S. central bank’s pledge to keep interest rates
low for an “extended period” means he probably won’t raise borrowing costs “for
a couple of meetings.”
Macro funds, whose managers seek to profit
from global themes or trends, advanced 1.7 percent in April. Long-short equity
funds, whose managers can bet on rising and falling stocks, returned 2 percent.
Multistrategy hedge funds increased 1.2 percent.
The hedge-fund industry exceeded $2
trillion in assets for the first time at the end of the first quarter, marking
a recovery from record investment losses and client withdrawals during the
financial crisis, according to Hedge Fund Research Inc. Funds added $102
billion of assets in the first three months as investment performance accounted for $70 billion and deposits from clients contributed
$32 billion, the Chicago-based firm said.
The main Bloomberg hedge-fund index is
weighted by market capitalization and tracks 2,772 funds, 1,356 of which have
reported returns for April.