May Puts Hedge Funds in the Black for 2008
U.S. small-cap hedge funds lead the way.
Fund Times
The Morningstar 1000 Hedge Fund Index earned 1.9% in May, pushing hedge funds into the black for 2008. Year to date, the index is up 1.2%.
Long equity hedge funds did particularly well in May, especially those invested in small-cap U.S. stocks. The US Small Cap Equity Hedge Fund Index outperformed all other categories in May, posting a gain of 5.5%, as the Russell 2000 Index gained 4.6%. Asian and European equity markets declined this month, but the Developed Asia Equity and Europe Equity Hedge Fund Indexes posted positive results. Similarly, Morningstar's Emerging Markets Equity Hedge Fund Index beat the MSCI Emerging Markets Index.
The Distressed Securities Hedge Fund Index saw its best month since October 2007, returning 1.2%, with defaults on the rise. The Convertible Arbitrage Hedge Fund Index experienced its best return in six months, as convertible bond issuance spiked in May. Global mergers and acquisitions activity also picked up pace, bolstering the Corporate Actions Hedge Fund Index, which earned 1.9%. The Global Trend Hedge Fund Index returned 2.2%, benefiting from record high energy and food prices during the month. Although spreads widened at month end, the Debt Arbitrage Hedge Fund Index ended positive at 1.1%.
For more hedge fund performance data, visit Morningstar's Hedge Fund Center.
| Morningstar Hedge Fund Index and Category Performance ( % ) | ||||
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| May-08 | Jan-May 08 | ||
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| Morningstar 1000 HF PR USD | 1.9 | 1.2 | ||
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| Morningstar Convertible Arbitrage HF PR USD | 1.2 | -0.2 | ||
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| Morningstar Corporate Actions HF PR USD | 1.9 | -0.4 | ||
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| Morningstar Debt Arbitrage HF PR USD | 1.1 | -1.5 | ||
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| Morningstar Developed Asia Equity HF PR USD | 0.5 | -2.6 | ||
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| Morningstar Distressed Securities HF PR USD | 1.2 | -0.9 | ||
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| Morningstar Emerging Markets Equity HF PR USD | 2.4 | -4.7 | ||
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| Morningstar Equity Arbitrage HF PR USD | 0.8 | 4.1 | ||
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| Morningstar Europe Equity HF PR USD | 1.7 | 2.5 | ||
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| Morningstar Global Debt HF PR USD | 0.5 | 0.6 | ||
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| Morningstar Global Equity HF PR USD | 2.5 | -0.2 | ||
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| Morningstar Global Non Trend HF PR USD | 1.2 | 3.5 | ||
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| Morningstar Global Trend HF PR USD | 2.2 | 11.4 | ||
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| Morningstar Hedge Fund of Funds PR USD | 1.6 | 0.2 | ||
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| Morningstar Multistrategy HF PR USD | 2.4 | 1.2 | ||
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| Morningstar Short Equity HF PR USD | -3.6 | -4.4 | ||
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| Morningstar US Equity HF PR USD | 3.1 | 1.4 | ||
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| Morningstar US Small Cap Eqty HF PR USD | 5.5 | -0.4 | ||
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| Russell 2000 TR USD | 4.6 | -1.8 | ||
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| S&P 500 TR | 1.3 | -3.8 | ||
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| MSCI EM USD | 1.6 | -2.9 | ||
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| MSCI Europe USD | -0.5 | -6.1 | ||
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| MSCI AC Asia GR USD | -0.2 | -4.2 | ||
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| LB US Agg Bond TR USD | -0.7 | 1.2 | ||
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| LB Global Agg TR USD | -1.1 | 3.4 | ||
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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. |