May ‘s gain marks the Index’s seventh advance in the past eight months and was an improvement over the 3.1% increase recorded in April (See Hedge Fund Index Up 3.1% in April ). Year-to-date, the Index is now up 7% net of fees, the best calendar-year start since 1999, according to a news release.
“Hedge funds enjoyed another month of benign markets in May and we’re pleased to see that 88% of the net returns submitted to us so far are positive,” remarked George Van, Chairman of VAN. “Of course, these favorable market conditions have been the exception rather than the rule over the past few years but hedge funds have been up to the task. Hedge funds have shown themselves to be ‘all-weather’ investments, generating gains in the bull market of the late-90s as well as in the bear market of 2000, 2001 and 2002.”
However, the preliminary Index data suggests that hedge funds were unable to keep pace with the bullish equity market last month. Major stock indexes turned in another rousing performance with the S&P 500 increasing 5.3% while theNASDAQ Composite and the MSCI World Equity Index rose 9% and 5.5%, respectively.
The Van Index tracks performance of the hedge fund universe dating back to January 1988. The Index is based on hedge fund performance after the deduction of all hedge fund fees and expenses. Van notes that the preliminary May figure is the average of approximately 250 fund returns.
An updated May Van Index, based on a larger sample of funds, will be released in mid-June. Final results for May will be available at www.hedgefund.com at the end of June.