Hedge funds showed positive performance across most strategies, with a weighted average return of 1.7% for May. Fixed income arbitrage strategies led the category with a 2.7% return, according to data from asset servicer Citco.
Hedge funds also experienced further net inflows, with Hybrid funds particularly attracting investor interest. Hedge funds rebounded strongly from April, maintaining a positive overall trend for 2024 with a year-to-date return of 8.26%. The top three performing strategies were fixed income arbitrage (2.7%), global macro (2.6%) and equities (1.8%). Conversely, event-driven funds were the worst performers, with a weighted average return of -1.2%.
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Capital flows were positive across all assets under administration categories in May, with net inflows totalling $3.2 billion, and YTD net inflows reaching $7.98 billion. Funds with over $3 billion in assets under administration performed best, achieving a weighted average return of 2.1%. Hybrid funds stood out, recording net inflows of $1 billion for May, marking four consecutive months of positive inflows.
Regionally, funds in the Americas led with the highest inflows at $2.7 billion, followed by Asia with $0.5 billion, while Europe remained flat. Two-thirds of hedge funds were in positive territory for May, a significant improvement from April’s 48%.
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Citco’s data also revealed that multi-strategy funds had a weighted average return of 1.4%, and commodities funds maintained positive returns for the sixth consecutive month. In contrast, event-driven funds faced their second consecutive month of negative returns at -1.2%.
Additionally, funds in the $1 billion-$3 billion assets under administration category saw returns of 1.3%, while those with $200 million-$500 million assets under administration had returns of 1%. Smaller funds with less than $200 million in assets under administration saw modest returns of 0.1%.
