The hedge fund industry continued to gain ground in May, latest figures show.

A broad measure of hedge fund returns showed that the industry logged gains of around 0.7 per cent in May, the fourth consecutive month of gains.

The HFRI Fund Weighted Composite Index logged year-to-date gains through May to 3.9 per cent, according to Hedge Fund Research, a performance that led the S&P 500 and Dow Jones Industrial Average equity market indices while the HFRI Fund of Funds Index climbed 1.1 per cent for May and 4.0 per cent since January, according to Hedge Fund Research, the Chicago-based organisation that tracks the sector.

Hedge fund strategy performance was led by the HFRI Equity Hedge Index, which added 1.3 per cent in May, bringing year-to-date gains to 5.1 per cent and
leading all main hedge fund strategies.

Equity Hedge performance was led by the HFRI Technology/Healthcare Index, which advanced 3.5 per cent for May, leading all hedge fund sub-strategies; the index has gained 8.5 per cent YTD, also the leading area of sub-strategy performance.

The HFRI EH: Fundamental Value Index gained 1.5 per cent, bringing YTD returns for fundamental value to 5.1 per cent. Partially offsetting these gains, the volatile HFRI Energy/Basic Materials Index declined by 1.4 per cent for the month, the seventh decline in the past 9 months.

Event driven
Event driven strategies – such as those making money from mergers and acquisitions - also advanced for the month, as M&A activity continued to surge, with the HFRI Event Driven Index gaining 0.6 per cent, bringing YTD performance to 3.9 per cent.

Event Driven sub-strategy performance was led by HFRI ED: Multi-Strat and
HFRI Merger Arbitrage Indices, which gained 1.1 and 0.9 per cent, respectively, for the month.

Macro hedge funds were impacted by directional currency and commodity volatility in May, with the HFRI Macro Index unchanged for the month. Macro performance was led by fundamental strategies, with the HFRI Macro: Discretionary Thematic Index advancing 0.7 per cent, while the HFRI Macro: Multi-Strat Index gained 0.5 per cent. Systematic CTA strategies declined for the month, as the HFRI Macro: Systematic Diversified/CTA Index fell by -0.4 per cent.

Through May, Macro sub-strategy performance was led by currency exposures,
with the HFRI Currency Index gaining 3.5 per cent.

The HFRI: Emerging Markets Index posted a narrow decline of 0.06 per cent for May, though EM leads regional exposures YTD with a gain of 6.5 per cent.