Hedge Funds Outperformed Equities In May

by Philip Morton, Investors Offshore.com

11 June 2008

It was announced on Tuesday that the Greenwich Global Hedge Fund Index returned +2.01% in May, extending its gain of +1.59% in April.

The S&P 500, MSCI World Equity, and FTSE 100 indices posted returns of +1.29%, +1.11% and -0.56%, respectively.

Year-to-date, the GGHFI has returned +0.49% while the S&P 500, MSCI World Equity and FTSE 100 have year-to-date returns of -3.81%, -3.98% and -6.33%, respectively. 83% of constituent funds in the GGHFI ended the month with gains.

“Across the board, hedge funds performed well in May. But the real story is told when comparing year-to-date performance,” noted Margaret Gilbert, Managing Director, continuing:

“Hedge funds are positive for the year compared to the major equity indices which still remain negative.”

For the second month in a row, Long/Short Equity managers were the best performing strategy group, posting a gain of +2.35%.

Growth funds showed the highest average gains within the group, while short-selling managers suffered the greatest losses.

Directional Trading managers, the best performing strategy group so far this year, exhibited another strong month in May, returning +2.00%.

Futures managers returned +2.23% on the strength of surging commodity markets, and are now up more than 10% for the year.

Specialty Strategy managers were the second-best performing strategy group in May, returning +2.10% on average.

Multi-Strategy managers led this group with a return of +2.50%.

The Market Neutral Group averaged +1.39% on the month as Event Driven managers continued to find opportunities in uncertain markets.

All subsectors of the Market Neutral Group gained on the month, with Merger Arbitrage and Distressed Securities managers posting the highest returns of +1.74% and +1.70%, respectively.

The May Index currently includes 1,345 constituent funds. Final May results will be posted later this month, once additional funds have submitted returns.

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