May was the best month in almost a decade for hedge funds, with the composite Eurekahedge Hedge Fund Index up a solid 5.2%, and the industry seeing net inflows (USD1.5 billion) for the first time in ten months.
The months gains were realised on the back of a continued surge in the underlying equity markets, which rallied strongly for the third straight month owing to better than expected macroeconomic data coupled with highly attractive valuations across most regions; the MSCI World Index gained 8.6% in May.
Hedge funds exposure to the currency and commodity markets also proved largely rewarding, as managers exploited the weakening of the US dollar against most other major currencies, and the notable increase in commodity prices (the CRB Index rose a record 14%) in May.
-Hedge funds up 9.2% YTD, while the S&P 500 was up 1.8% as at end-May 2009,
-Early reporting funds suggest net inflows for the first time in ten months for 09 May; USD3.2 billion of inflows more than offset redemptions of USD1.7 billion,
-Hedge funds assets up USD5 billion or 0.4% in May, as small funds (< USD100 million in assets) outperformed large funds ( > USD500 million in assets) by over 3%.
L.D.