Hedge funds recorded their fifth consecutive month of gains since the start of the year. The Eurekahedge Hedge Fund Index was up 0.43 percent in May, below its equity benchmark the MSCI World Index which gained 0.81 percent.
Hedge funds overall returned 4.37 percent for the year to date as they increased assets under management by US$86.5 billion.
Funds investing in China were the best performers returning 25.21 percent on the back of strong equity markets in China and Hong Kong, a Eurekahedge flash report noted.
The Hang Seng Index is up 16 percent while the CSI 300 Index rallied 36.99 percent in the first five months of the year.
Assets under management by Asian hedge funds increased by US$15 billion during the current year and reached their pre-financial crisis high with US$176 billion.
In May, China-mandated funds grew 2.79 percent compared to 3.24 percent for funds investing in India and 2.04 percent for funds focusing on Japan buoyed by the strong performance of the underlying equity markets and a declining yen which depreciated 3.51 percent against the U.S. dollar, the data provider said.
Meanwhile, European hedge funds gained 0.72 percent during the month and outperformed stock indices such as the MSCI AC Europe Index. The strong performance of U.S. investing long/short equity hedge funds was tempered by losses for CTA/managed futures funds.
The Eurekahedge Long/Short Equity Hedge Fund Index is up 7.17 percent year-to-date and long/short equity managers also led the performance in May with gains of 1.37 percent, followed by arbitrage, event driven, macro and fixed income funds.
CTA/managed futures hedge funds, in turn, were down 0.21 percent in May and multi-strategy, distressed debt and relative value hedge funds also posted losses.