HFM Insight’s latest performance update covers the performance and assets under management of emerging funds in May, alongside the HFM Indices performance.
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Highlights:
- Hedge funds managing less than $1bn averaged gains of 1.4% in May, extending returns for the year to 8.9%.
- Sub-billion-dollar hedge funds are outperforming $1bn-plus peers in 2021
- Long/short equity leading returns among sub-$1bn funds despite market turbulence
- Event-driven also performing well but strategy’s top returns by $1bn-plus funds
Overview
Hedge funds managing less than $1bn averaged gains of 1.4% in May, extending returns for the year to 8.9%. That puts smaller funds ahead of billion-dollar-plus funds, which averaged 1% in May and 6.9% for the year so far. Long/short equity gains have fuelled the outperformance, with the industry’s largest strategy by assets and funds up 11.2% among sub-$1bn funds so far this year, compared to 7.7% for those over. It has been a positive but lopsided start to the year for long/short equity, with early gains in growth and tech stocks before a factor rotation brought gains for longsubdued value names. Retail traders acting in coordination around GameStop and other stocks have brought turbulence, while equity market gains have limited shorting opportunities. Alongside long/short equity, event-driven is the standout strategy this year following the renewal in corporate dealmaking and big gains from backing Spac-structures in January and February. But unlike long/short equity, larger event names are outperforming smaller peers, with $1bn-plus funds up 15.1% year-to-date compared to gains of 10.8% among sub-$1bn funds.
Hedge fund performance | YTD through May 2021 (%)
(Source: HFM Insights)
| HFM Benchmark | May-21 | Apr-21 | Mar-21 | Q2 2021 | 12 months | YTD | 2020 |
| <$1bn hedge funds | 1.4% | 2% | 0.9% | 3.4% | 26% | 8.9% | 13.1% |
| HFM Global Composite | 1.5% | 2.1% | 0.9% | 3.63% | 25.3% | 8.9% | 11.9% |
| +$1bn hedge funds | 1% | 2.2% | 0.7% | 3.2% | 19.8% | 6.9% | 9.6% |
| FoHF composite | 0.6% | 2.1% | 0.2% | 2.71% | 20% | 5.5% | 10.7% |
| S&P 500 | 0.55% | 5.24% | 4.24% | 5.82% | 38.1% | 11.9% | 16.3% |
Overall industry AuM ($bn) | May 2021*
(Source: HFM Insights)
Analyst note: Data subject to future revision. * AuM managed by North American, APAC and European managers, excludes Ucits.
Hedge fund performance | 12m compound return
(Source: HFM Insights)
Analyst note: Indices are based on reported data at time of publication and are subject to future revision.
| HFM Benchmarks | 12m return | 12-month Sharpe | 3yr ann. return | 36-month Sharpe |
| <$1bn hedge funds | 26% | 4.3 | 31.5% | 1.0 |
| +$1bn hedge funds | 19.8% | 4.4 | 27.2% | 1.0 |
| HFM Composite | 25.2% | 4.3 | 28.7% | 0.9 |
HFM INDICES PERFORMANCE TRACKER
| Fund | May-21 | Apr-21 | Mar-21 | Q2 2021 | 12 months | YTD | 3yr ann. |
| Event-driven | +$1bn | 2.8% | 4.1% | 0.9% | 7% | 42.1% | 15.1% | 9.1% |
| L/S equity | <$1bn | 1.3% | 2.6% | 0.5% | 3.9% | 38.5% | 11.2% | 12.2% |
| Multi-strategy | <$1bn | 1.1% | 1.4% | 0.7% | 2.5% | 29.2% | 10.9% | 10.6% |
| Event driven | <$1bn | 1.4% | 2.5% | 1.4% | 3.9% | 31.8% | 10.8% | 8.3% |
| HFM Global Composite Index | 1.5% | 2.1% | 0.9% | 3.63% | 25.3% | 8.9% | 8.9% |
| Managed futures | +$1bn | 1.7% | 2.9% | 1.2% | 4.6% | 11.1% | 7.8% | 7% |
| L/S equity | +$1bn | 1% | 3.1% | 0.1% | 4.1% | 27.4% | 7.7% | 11.3% |
| Managed futures | <$1bn | 1.1% | 2.2% | 0.7% | 3.3% | 12.3% | 7.3% | 6.6% |
| RV/arbitrage | <$1bn | 1% | 1% | -0.1% | 2% | 23.5% | 6.6% | 11.7% |
| Macro | +$1bn | 1.2% | 2.5% | 1% | 3.7% | 17.2% | 5.9% | 7.2% |
| Macro | <$1bn | 1.8% | 1.4% | 0.3% | 3.2% | 19% | 5.9% | 8.9% |
| HFM FoHF Composite Index | 0.6% | 2.1% | 0.2% | 2.71% | 20% | 5.5% | 6.1% |
| Multi-strategy | +$1bn | 1.2% | 1.2% | 0.9% | 2.4% | 11.3% | 5.3% | 5.7% |
| RV/arbitrage | +$1bn | -0.7% | 1.7% | -1.7% | 1% | 21.9% | 4.8% | 9.5% |
| Fixed income/credit | +$1bn | -0.5% | 0.9% | 0.5% | 0.4% | 15.7% | 3.7% | 5.5% |
| Fixed income/credit | <$1bn | -0.1% | 0.8% | 0.7% | 0.7% | 14.7% | 3.6% | 6.8% |
(Source: HFM Insights)
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