MSCI Hedge Fund Index Up 1.94% in April

April’s 1.94% gain was a marked turnaround from March’s 0.47% loss (See  MSCI Hedge Fund Index Slides 0.47% in March ) and the final numbers were very close to preliminary results released earlier this month (See  MSCI Hedge Fund Index Finds Joy In April ).   Of note, all the Index’s process groups were in positive territory for the month, according to a MSCI news release.

Components

April’s largest process group gainer was Specialist Credit, up 2.66%.  Specialist Credit, those funds that seek to lend to credit-sensitive issuers, was likewise buoyed by returns in Distressed Securities, which gained 4.00%.

Likewise, gains were seen in Security Selection and Multi-Process Group.     Security Selection Index, those managers who combine long positions and short sales with the aim of benefiting from their ability in selecting investments while offsetting systematic market risks, ended the month 2.60% higher.   Multi-Process Group funds, strategies that focus on spread relationships between pricing components of financial assets or commodities, was the third best performing process group for April with a 2.36% return. 

The other two categories Directional Trading and Relative Value were up 1.21% and 0.94%, respectively.  

Taken another way, and broken down by asset class, April’s top performer was the MSCI Hedge Fund Fixed Income Index, which gained 2.22%.  This performance was followed by the MSCI Hedge Fund Equity Index gaining 2.15%, while the MSCI Hedge Fund Diversified Index was up 1.35%.

Overall though, the index’s performance was much lower than the MSCI World Equity Index, up 8.64%.   For the year, the index is up 3.68%, outperforming its World counterpart, which is up 2.66%.

The MSCI Hedge Fund Indices are composed of more than 160 indices. More than 1,700 hedge funds have agreed to participate in the database and there are over 1,400 hedge funds currently in the MSCI Hedge Fund Indices and Database.