Jun 13, 2019

Hedge funds outperform equities in May

Data: eVestment; Table: Axios Visuals

Hedge fund returns fell last month after four straight months of positive results to start the year, but managed to outperform the broader U.S. stock market — posting much slimmer losses.

Be smart: The data from market research firm eVestment found nearly all hedge fund categories outperformed the S&P 500 in May. Equity strategies had the worst performance among primary markets hedge funds, but still outpaced the S&P by more than 400 basis points, with quantitative directional strategies delivering overall positive returns for clients during the month.

The big picture: Hedge funds have seen significant redemptions and declining popularity as they have dragged well behind the overall market's returns for more than a decade. Year-to-date, hedge funds still trail the S&P, but May's stock market swoon showed hedge funds remain a solid alternative for investors to offset risk and may help redeem the industry.

Reality check: Hedge funds were comparable to a benchmark fund of 50% global stocks and 50% global bonds in reducing losses during the month, measured by the mix of MSCI's all-world stock index and Citi's world government bond index.

  • Investment in such strategies is also generally significantly less expensive than hedge funds.

Go deeper: The hedge fund moment is over

Go deeper

Tech can't remember what to do in a down market

Illustration: Rebecca Zisser/Axios

Wall Street's two-day-old coronavirus crash is a wakeup alarm for Silicon Valley.

The big picture: Tech has been booming for so long the industry barely remembers what a down market feels like — and most companies are ill-prepared for one.

Brace yourself for a coronavirus outbreak

Illustration: Aïda Amer/Axios

Public-health officials’ warnings about the coronavirus are sounding increasingly urgent, with one top CDC official asking the public yesterday "to prepare for the expectation that this might be bad."

Reality check: Other administration officials, including President Trump himself, were more subdued in their assessments. But underneath those tonal differences, the reality of the coronavirus is the same: It spreads quickly, and has already spread to many countries, making it likely to start spreading here, too.

Exclusive: Pro-Trump group plans post-Super Tuesday blitz on Democrats

Democratic presidential hopefuls take the debate stage in South Carolina. Photo: Logan Cyrus/AFP via Getty Images

Pro-Trump super PAC America First Action is preparing to unleash a series of targeted, swing-state attacks on the Democrats most likely to face President Trump after Super Tuesday, people familiar with the group's plans tell me in an exclusive preview of its strategy.

The state of play: The group has been tracking favorable/unfavorable ratings in Florida, Georgia, Michigan, North Carolina, Ohio and Pennsylvania for 2020 candidates Joe Biden, Bernie Sanders, Elizabeth Warren, Pete Buttigieg and Michael Bloomberg — under the theory that if Trump wins each of these six states he would win re-election.