Hedge Fund Sector Review

Hedge Funds Have produced generally positive performance YTD in 2013 through May with fundamental and tactical trading managers benefiting from a more favorable macro economic backdrop and supportive market conditions.

Equity  L/S

Equity Long/Short managers have generated positive YTD performance through May. While monthly returns have been consistently positive, performance in recent months has been muted than in early 2013. Regional dispersion has been evident, as managers with greater long exposure to the US and Japan have typically outperformed those with greater emerging markets and European exposure.  Sectoral dispersion has also been notable, with larger exposures to the consumer and financial sectors typically resulting out performance as compared to managers with more significant industrials and materials exposure.

Event Driven

Event Driven managers have generated strong YTD through May gains driven by exposure to special situation equities. The performance of credit positions was also generally positive  YTD, as corporate credit yields hovered around their all time lows, benefiting performing and non-performing credit positions. Merger arbitrage positions experienced more muted gains, as maangers exposure remained below their long-term averages.

Tactical Trading

Macro managers have posted positive performance on a YTD basis through May, driven largely by equities and currency trading. Fixed-income trading has produced mixed performance; while differentiated views on US growth resulted in in differentiated positioning and performance across managers, uniform long positions in European rates generated more consistent positive performance. Attribution from commodities has been roughly flat, with risk levels below historical averages.

Relative Value

Relative value managers have generated positive performance on a YTD basis through May, with modest gains seen across most sub-strategies. Credit relative value and multi-strategy managers have largely outperformed fixed-income relative value, while equity market neutral strategies have experienced mixed performance.

 

 

Hedge fund sector review by AIMS Goldman Sachs, 

 

 

 

 

 

 

 

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