PivotalPath has released their monthly report, the Pivotal Point Of View, which measures performance among 2,600+ institutionally-relevant hedge funds. In May, the Composite returned 0.2%, bringing the total index to 2.0% for the year. While 55% of all funds reported positive returns last month, this is down from 67% who reported positive returns YTD.
Q1 2023 hedge fund letters, conferences and more
Below are a few quick highlights.
- What did well? Equity Sector and Equity Diversified continue to lead all indices, up 7.2% and 3.2% YTD, respectively. Within Equity Sector, TMT is up 11.8% YTD while Financials is down 6.6%.
- Dispersion among top and bottom performing managers is down. After retreating to a 46-month low in April, PivotalPath’s proprietary Dispersion Indicator fell slightly again in May. On average YTD, it is now BELOW its historical average dating back to January of 2008, after a multi-year period in which it remained at extreme highs.
- The modest increase in the yield curve inversion increases the likelihood of a 2nd half recession and the potential of Fed cutting rates. This shift has resulted in in the continued rally in the Biotech sector (XBI) +4.64%, Technology (XLK) +8.92%, and Communications (XLC) +3.91%. Energy (XLE) declined 10.03% along with Materials (XLB) -6.87%. Energy is now the worst performing sector YTD, down 12.4%.
- Volatility increased in May, with the VIX +13.7% - its largest month of the year.
