Hedge Funds Rebound in April
Relative returns suggest managers remain cautious.
Fund Times
The Morningstar 1000 Hedge Fund Index rebounded in April, gaining 0.96% after March's 1.53% loss, but still fell short of its 2.24% gain in April 2007.
Many of the hedge fund category indexes showed improvement over March, particularly those with long equity exposure. The S&P 500 and Russell 2000 both earned over 4% in April. Accordingly, the US Equity and US Small Cap Equity Hedge Fund Indexes posted large gains, 2.73% and 3.04%, respectively, the highest of all category indexes. The fact that these categories performed worse than the major market indexes, however, suggests that hedge fund managers remain cautious about the markets and are hedged accordingly. Similarly, emerging-markets hedge funds posted modest gains, with the Morningstar Emerging Markets Hedge Fund Index advancing 2.04% compared with the MSCI Emerging Markets Index, which recorded a 7.87% gain in April, buoyed by China.
The Global Trend Hedge Fund Index showed the biggest loss in April, 1.66%, as trends in some commodities, such as gold, lost steam. As the equity markets stabilized slightly in April and the dollar strengthened, some commodities markets saw corrections.
For more hedge fund performance data, visit Morningstar's Hedge Fund Center.
| Morningstar Hedge Fund Index and Category Performance ( % ) | ||||
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| Apr-07 | Mar-08 | Apr-08 | |
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| Morningstar 1000 HF PR USD | 2.24 | -1.53 | 0.96 | |
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| Morningstar Convertible Arbitrage HF PR USD | 0.54 | -2.27 | 0.83 | |
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| Morningstar Corporate Actions HF PR USD | 2.24 | -2.22 | 0.57 | |
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| Morningstar Debt Arbitrage HF PR USD | 1.36 | -1.71 | -0.09 | |
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| Morningstar Developed Asia Equity HF PR USD | 0.43 | -2.68 | 2.69 | |
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| Morningstar Distressed Securities HF PR USD | 2.06 | -1.09 | 1.29 | |
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| Morningstar Emerging Markets Equity HF PR USD | 3.29 | -4.57 | 2.04 | |
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| Morningstar Equity Arbitrage HF PR USD | 1.90 | -0.13 | 0.44 | |
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| Morningstar Europe Equity HF PR USD | 3.33 | -0.13 | 0.13 | |
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| Morningstar Global Debt HF PR USD | 1.53 | 0.54 | -0.28 | |
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| Morningstar Global Equity HF PR USD | 2.75 | -2.69 | 2.37 | |
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| Morningstar Global Non Trend HF PR USD | 1.86 | -0.93 | 0.82 | |
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| Morningstar Global Trend HF PR USD | 4.32 | -0.30 | -1.66 | |
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| Morningstar Multistrategy HF PR USD | 2.05 | -2.23 | 0.32 | |
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| Morningstar Short Equity HF PR USD | 0.52 | 0.49 | 1.15 | |
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| Morningstar US Equity HF PR USD | 2.67 | -2.40 | 2.73 | |
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| Morningstar US Small Cap Eqty HF PR USD | 2.48 | -3.43 | 3.04 | |
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| Morningstar Hedge Fund of Funds PR USD | 2.38 | -1.39 | 0.52 | |
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| S&P 500 TR | 4.43 | -0.43 | 4.87 | |
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| MSCI EM USD | 4.40 | -5.40 | 7.87 | |
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| Russell 2000 TR USD | 1.80 | 0.42 | 4.19 | |
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| MSCI Europe USD | 5.98 | 0.04 | 3.89 | |
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| MSCI AC Asia GR USD | 0.33 | -4.97 | 7.67 | |
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| MSCI China USD | 3.49 | -12.18 | 15.36 | |
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| All returns are in U.S. dollar terms. Returns are based on hedge funds in the Morningstar indexes that reported performance as of May 13, 2008. |