European and global equity funds bore the brunt of the
turbulent market conditions in April as hedge funds struggled
to cope with a sharp outbreak of intra-month volatility
– with May looking likely to have been an equally
difficult month for many long/short equity players.
Although equity markets generally finished higher after a
febrile month, April was marked by some savage movements in
individual stocks as a result of massive investor rotation out
of momentum and cyclical stocks – notably in the tech
and other growth sectors.
Although the overall EuroHedge Composite index was fairly
flat on the month – showing a loss of just 0.1% at
this stage – many long/short equity funds suffered
some big drawdowns in what was a fairly tumultuous month.
With numbers in from about 80% of the funds reporting to the
EuroHedge database, the European equity long/short index for
dollar-denominated funds is showing a median loss of around
1.3% on the month – its worst performance since May
2012 – on top of the 0.7% loss in March, although the
median return for euro-denominated European equity funds is
much better at just -0.25%.
Global equity funds fared equally poorly in April –
with the median return for dollar-denominated global equity
long/short managers also showing a loss of 1.3% on the month,
and with the index for euro-denominated global equity funds
standing at around -0.8%.
By contrast, the embattled managed futures sector had a rare
positive month – with the median index up by around
0.8% for CTAs in April – while the medians for credit
and emerging market debt funds were also positive on the
Among individual equity funds, Odey European was among the
biggest losers – down by almost 8% in April for a
year-to-date loss of more than 12% after the first four months
of the year – while Tosca Mid-Cap also fell by more
than 8% on the month, taking the fund into negative territory
for the year at -6%.
Clareville Capital’s UK-focused Pegasus fund
was also a prominent casualty in April’s
hyper-volatile markets – dropping 10% on the month
– while Lansdowne European Equity was down by around
5% and New York-based Dabroes took a 5.75% hit.
In global equity, Bremner Fundamental was down by over 10%
in April, while the big Lansdowne Developed Markets Fund took a
tumble of more than 7%. Algebris Global Financials also
suffered, dropping almost 7%, while Sloane
Robinson’s SR Global Fund lost 6.6% and Jabre
Global Balanced was off by 4%.
There were some notable outperformers on the upside too in
equities. Eurofin Wittenberg Small and Mid-Cap – the
new strategy run by veteran managers Steve Alder and Ralph
Jainz – was up by over 7% on the month (a full profile
of the fund will be published in the May issue of EuroHedge
next week), while former BlueGold equity manager Jean-Louis Le
Mee produced a 15% return with his Abydos commodities-focused
long/short global equity fund.
Rory Powe’s PCM Europe was up by 7.6% on the
month, while there were also notable monthly returns for
Redstream (the former RAB Energy fund, which was up by almost
10% in April) and RAB Special Situations (which gained almost
In event-driven, Tyrus Capital was again the outstanding
performer – gaining almost 3% in April for a striking
year-to-date return of nearly 14% (and a rolling 12-month
return of 33.34%), while in macro Laurentia gained 4% for a YTD
return of 12% in a month that saw losses of 2% plus for a
number of macro funds including OneWall, Brummer Canosa, TT
International and ABD Investment. Brevan Howard fell by 1% for
a 4% loss so far this year.
In managed futures, meanwhile, a much better month for most
trend-following systematic trading strategies saw good monthly
returns for a change from a number of leading players in the
CTA space including Man AHL Evolution, Discus, SMN, Lyxor
Epsilon, Amplitude, QCM, Solaise, Winton and Aspect.
Click here to view the live EuroHedge monthly performance
league tables for April