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“Equity markets in both developed and emerging countries saw share prices rally in May,” says Sol Waksman, founder and president of BarclayHedge.
“A recent Wall Street Journal article attributed the rise to trillions of dollars of bailout money finding its way into financial markets.”
All 18 of Barclay’s hedge fund indices had a positive return in May. The Barclay Emerging Markets Index soared 10.72%, Equity Long Bias jumped 6.94%, the Event Driven Index gained 5.90%, Distressed Securities rose 5.56%, Technology gained 4.38%, Global Macro was up 4.23%, and Pacific Rim Equities rose 4.01%.
“Of the 2,400 hedge funds that have provided us with May data thus far, 90 percent are reporting a profit,” says Waksman.
The Barclay Emerging Markets Index is leading all hedge fund strategies in 2009 with an impressive 20.88% return after five months. Emerging Markets gained 4.59% in March, 8.84% in April, and 10.72% in May.
“Emerging Markets have provided excellent trading opportunities for hedge fund managers, offering double-digit gains in seven of the past ten years,” says Waksman.
“Overall, the Barclay Emerging Markets Index is up 223.62 percent in ten years, a compound annual return of 12.46 percent.”
Other top year-to-date performers include Barclay’s Convertible Arbitrage Index, up 19.83%; the Event Driven Index, up 13.16%; Equity Long Bias, up 11.92%; and the Multi-Strategy Index with a gain of 11.16%.
“May also witnessed a continued decline in the price difference between US Treasuries and high yield bonds,” says Waksman. “The differential declined to 400 basis points at the end of May from 650 at the end of March. The narrowing of the price differential is beneficial to hedge funds trading fixed income.”
The Barclay Fund of Funds Index gained 3.05% in May.
Click here to view five years of Barclay Hedge Fund Index data, or download 11 years of monthly data.
Sol Waksman is an experienced media source, providing perspectives on hedge fund and managed futures trends. For more commentary or background, call 641-472-3456 or email swaksman@barclayhedge.com.
BarclayHedge (formerly The Barclay Group) was founded in 1985 and actively tracks more than 6,000 hedge funds, funds of hedge funds, and managed futures programs. Barclay has created and regularly updates 18 proprietary hedge fund indexes and eight managed futures indexes.
Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge data as performance benchmarks for the hedge fund and managed futures industries.
