Hedge Funds Appreciated In May Alongside Global Equity Markets

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HFA Staff
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Hedge Fund

PivotalPath has released their monthly report, the Pivotal Point Of View, which measures performance among more than 2,500 institutionally-relevant hedge funds and spanning $3T of industry assets.

Key Takeaways:

  • Hedge funds appreciated in May alongside global equity markets. Economic data continues to drive markets with historically low unemployment and stable/slowly declining inflation. The benign data gave markets the fuel to resume their pre-April trajectory.
  • The PivotalPath Composite Index appreciated 1.1% in May and is up 6.1% YTD. The Index continues to generate positive alpha of 6.3% relative to the S&P 500 (S&P) over the last 12 months, even as equity markets declined in April and recovered in May.
  • Hedge funds are experiencing a period of strong performance. The PivotalPath Composite Index is now in the 90th percentile of all 12-month rolling periods dating back to 2014.
  • Hedge funds continue to produce positive Alpha with Managed Futures, Global Macro and Credit continuing to produce the highest Alpha on a rolling 12-month basis.
  • Smaller funds outperformed larger funds in May due to equity concentration in funds under $100mm.

2024 Hedge Fund Performance

Strategy Highlights: Is 2024 the year of the stock picker?

  • Equity Sector (1.4% MTD, +6.8% YTD)
  • Financials, Energy (Utilities) and TMT appreciated 2.9%, 4.4% and 2.4% respectively, with energy stocks receiving positive flows from managers across the month (see below).
  • PivotalPath’s Healthcare Sector declined 0.9% in May but is +5.4% YTD.
  • The Equity Diversified Index (+2.2% MTD, +7.8% YTD) was driven by Long/Short strategies in Asia +3.0% and in the US +2.6%.
  • The Managed Futures Index declined 1.4% in May, but remains the best performing index this year at +8.8%.

2024 Hedge Fund Performance

Energy continues to ignite interest

The PivotalPath Equity Sector: Energy/Utilities/Industrials Index continued to exhibit strong performance.

At 4.4% it was the best performing PivotalPath index across May. Its returns now sit in the 75th percentile of all 5-month rolling periods dating back to 2000.

Energy/Utilities continue to benefit from the shift created by the power needs of new and emerging tech, particularly AI, as well as still high prices. Managers believe utilities are experiencing a sector rotation, with several names pegged to behave almost like tech stocks as they benefit from the AI ‘goldrush’.

Read the full report here by PivotalPath

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.