{"id":28544,"date":"2013-05-13T00:05:00","date_gmt":"2013-05-12T22:05:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/hedge-funds-continue-their-positive-run-in-april\/"},"modified":"2013-05-13T00:05:00","modified_gmt":"2013-05-12T22:05:00","slug":"hedge-funds-continue-their-positive-run-in-april","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/hedge-funds-continue-their-positive-run-in-april\/","title":{"rendered":"Hedge funds continue their positive run in april"},"content":{"rendered":"

Risk assets mostly rallied in April after a modest sell off in
\nthe beginning of the month and most hedge fund strategies
\ngenerated positive returns for the month.<\/strong> Economic data
\ncontinues to paint a picture of a mixed recovery with
\ndisappointing data in Asia and Europe and shallow growth in
\nthe U.S. Equity markets corrected about 5 to 10% in mid
\nApril due to disappointing macro news but data in the
\nsecond half of the month rebounded slightly.<\/p>\n

From a bottom up perspective, the Q1 earnings season in
\nthe U.S. also firmed slightly from a weak start.<\/strong> Companies on
\naverage beat EPS estimates by 6% whereas the pace was
\ncloser to 3% at the start of the earnings season. Central
\nbanks also reminded investors that accommodative policies
\ncan be further eased if data remains weak. Risk assets rallied
\nafter the Federal Reserve noted it may expand QE if the data
\nwarrants it. The ECB was also more dovish than investors
\nexpected.<\/p>\n

Strategy-wise, L\/S equity funds generated positive
\nreturns in April and generally benefitted from the rally. Variable
\nand long bias strategies were up 0.4% and 0.6% respectively
\nbenefitting from net long exposure to the market.<\/quote>
\n L\/S Equity
\nNeutral strategies were up 3.9% and showed the best
\nperformance in April. Correlation among stocks remains low
\nat about 30% and continues to provide a fertile environment
\nfor stock picking on both the long and short side.
\nAdditionally, earnings season is providing company specific
\ncatalysts for additional dispersion.<\/p>\n

Event driven strategies performed well with Merger
\nArbitrage strategies up 1.5% in April, Distressed up 0.8% and Special Situations up 0.1%.<\/strong> Merger Arbitrage was helped by
\nthe general risk on environment where deal spreads mostly
\ntightened. The pace of new deal announcements is
\ndisappointing given the level of cash on company balance
\nsheets. Companies are generally focusing on returning
\nmoney to shareholders via buybacks and dividends instead
\nof making big acquisitions.<\/p>\n

Credit funds generated strong performance with L\/S
\nCredit Arbitrage up 1.3% and Convertible Bonds up 0.8% as
\nwell. <\/strong> The compression of spreads and lower bond yields
\ncontinued in April which helped the strategies. New bond
\nsupply is outpacing last year\u2019s level as companies take
\nadvantage of the low rate environment. This is highlighted by
\nApple\u2019s record bond offering at the end of April which was in
\nhigh demand despite the small premium over the risk free
\nrate. Net fund flows remained positive, with loan funds
\ncontinuing to see greater inflows than that of bond funds. In
\nstructured credit, new CLO issuance tumbled in April as new
\nregulation was enacted that now requires banks to take a
\nlarger capital charge for such assets (legacy CLOs are not
\nsubject to the new guidelines).<\/p>\n

Long term CTA strategies did well in April with the
\naverage fund up 3.0%.<\/quote>
\n Long and medium term trends
\npersisted in many markets as equity prices climbed while
\nbond yields and commodity prices declined. Short-term
\nCTA\u2019s performance was weaker with the average fund down
\n0.9%. Short-term strategies were hurt by seesaw price
\nswings in April caused by weaker than expected economic
\ndata.<\/p>\n

\u201cMarket reaction remains liquidity driven and hedge fund
\nexposures show that managers continue their constructive
\npositioning\u201d<\/em> says Stefan Keller, Head of Managed Account
\nPlatform Research & External Relations at Lyxor AM.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Lyxor Hedge Fund Index was up +0.8% in April,
\nbringing year-to-date performance to +3.2%. 12 Lyxor
\nStrategy Indices out of 14 ended the month in positive
\nterritory, led by the Lyxor L\/S Equity Market Neutral Index
\n(+3.9%), the Lyxor CTA Long Term Index (+3.0%) and the
\nLyxor Merger Arbitrage Index (+1.5%).<\/p>\n","protected":false},"author":20,"featured_media":28542,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1470],"tags":[1687,1743,1655,1671,1690,1651,1437,1662,1672],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/28544"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=28544"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/28544\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/28542"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=28544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=28544"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=28544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}