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Hedge Fund Industry Lost 0.83% in May—Remains 1.85% in the Positive for the Year

May Sends Macro-, Arbitrage-, Vol-Traders and Multi Strats Sliding into the Red for 2023

FAIRFIELD, IOWA   June 07, 2023

After two consecutive months of gains, the hedge fund industry lost ground in May, down -0.83% for the month, according to the Barclay Hedge Fund Index compiled by Backstop BarclayHedge.
By comparison, the S&P 500 Total Return Index was up 0.43% in May.

The hedge fund industry remained in positive territory year-to-date through May, up 1.85%. The S&P 500 Total Return Index is up 9.65% over the same period.

“The hype-cycle around artificial intelligence continued to boost technology stocks in May. It delivered gains for tech-focused vehicles and is responsible for a meaningful share of the S&P 500’s progress in 2023,” said Ben Crawford, Head of Research at BarclayHedge.

Nearly a third of hedge fund subsectors were up on the month. Chief among them was the Technology Index, which was up +6.20%. Other subsectors gaining ground during the month included the Emerging Markets Latin American Equities Index ahead +3.83%; the Pacific Rim Equities Index up +2.40%; Emerging Markets Sub Saharan Africa Index climbing +2.13%; and the Emerging Markets Latin America Index notching +1.21%.

A sizable majority of hedge fund subsectors tracked posted losses in May. The hardest hit was the European Equities Index, which sunk -3.15%. Elsewhere, the Multi Strategy Index slid -1.97%; the Healthcare & Biotechnology Index receded -1.84%; the Emerging Markets MENA Index slipped -1.66% and the Emerging Markets Asian Equities Index was off -1.53%.

Considering May’s results, the bulk of hedge fund subsectors remained positive over the year-to-date interval. The Emerging Markets MENA Index has been the pacesetter returning a compound +14.88% through May. Close at its heels is the Technology Index, which is up +13.19% in 2023. A bit further back in the pack was the Pacific Rim Equities Index with a compounded return of +6.74%; the Emerging Markets Sub Saharan Africa Index ahead +5.11%; the Emerging Markets Latin American Equities Index up +4.55%; the Emerging Markets Global Fixed Income Index advancing +3.89%; and the Option Strategies Index +3.14% in the black.

As for the subsectors that have lost ground on the year-to-date period, the losses have been generally modest: The Distressed Securities Index is the furthest in the hole, yet it is down only -0.88%. After May’s somewhat dramatic downturn, the European Equities Index found itself off -0.84%. Several other subsectors, which had heretofore been treading water, found themselves foundering after losses in May. This group included the Global Macro Index sinking -0.60%; the Multi Strategy Index dropping -0.54%; the Volatility Trading Index down -0.53%; and the Merger Arbitrage Index underwater -0.45%.

For a complete table of BarclayHedge Hedge Fund and Sub-Index results for May, as well as historical returns, click here.

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