Hedge funds performance declined for a second straight month in May as geopolitical and economic tensions maintained considerable market upheaval.
The Eurekahedge Hedge Fund Index dropped by -0.52% in May 2022, outperforming the NASDAQ by 1.53%, but trailing the S&P 500 which eked out a 0.01% return over the same period, Eurekahedge reported.
Still, around 38.6% of global hedge funds have generated positive returns in May, while 43% have maintained a double-digit performance throughout the year.
On a year-to-date basis, global hedge funds were down -2.61%, outperforming the S&P 500 which returned -13.30% over the same period.
As markets were digesting high inflation, rising interest rates, the effects of the latest BA.4 and BA.5 Omicron subvariants, global supply chain disruptions and general economic tensions in response to Russia’s war in Ukraine, hedge fund returns were negative across geographic mandates in May, except for Latin America-focused funds, which posted a return of 0.88%, the data provider said.
Even the Eurekahedge CTA/Managed Futures Hedge Fund Index was down -0.20% in May, snapping its five-month winning streak, because commodity prices, except for oil, retreated during the month cue to concern over an impending global recession.
Fund managers focusing on cryptocurrencies as represented by the Crypto-Currency Hedge Fund Index declined -22.62% in May, bringing their year-to-date return to -40.14%.
A survey of investor intentions by Intelligence from April 2022 showed that private equity (72%) and hedge funds (54%) were the alternative asset classes most likely to see inflows from US investors in the coming months.
While US allocators have shown a preference for private markets in recent years, they are less likely to invest in all asset classes compared to the last survey carried out in December 2021 – with private equity and equities down 10% or more.
The intention to invest in real estate saw the smallest decline of 3%. The survey was based on 434 investors, including foundations/endowments, family offices, and corporate and private pensions.
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