NEW YORK (HedgeWorld.com)–Hedge funds returned 3.6% in May, based on the preliminary data collected by Morgan Stanley Capital International.
With that strong performance in May, year-to-date returns for the MSCI Hedge Fund Composite Index climbed to 7.4%. April's composite return was revised to 2% from the preliminary report of 1.9%.
Equities outpaced hedge funds in those periods, though. The Standard & Poor's 500 stock index returned 5.09% in May and was up 9.52% year-to-date through May, while the MSCI World Equity Index returned 5.5% and 8.3% in the same respective periods. The MSCI World Sovereign Debt Index returned 4.4% in May and 9% in the first five months of the year.
The strongest performing MSCI sub-index was the MSCI Directional Trading Index, which is comprised of global macro funds and futures funds. That category returned 5.2% in May and was up 10.5% year-to-date through May, based on the preliminary reports. The Directional Trading Index returned 1.2% in April, with preliminary results showing 1.3%.
MSCI's Security Selection Index, which has a strong equity component of long/short equity, market neutral, and short funds, zoomed 4.3% in May, bringing its year-to-date returns through May to 7%. April returns were revised downward from preliminary results to 2.7% from 3.1%.
