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Long/Short Managers Rebound

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NEW YORK (–Hedge funds returned a strong 2% in April, boosted by a rebound in the performance of long/short equity managers, according to preliminary data collected for the MSCI Hedge Fund Composite Index.

April’s performance follows a relatively lukewarm first quarter of the year, when returns were 1.69% for the composite index and were -0.47% in March (the preliminary March return was 0.4%). Year-to-date through April, the MSCI Composite returned 3.7%.

The MSCI World Equity Index returned 8.6% in April and was up 2.7% year-to-date, while the S&P 500 stock index returned 8.1% and 4.22% in the same respective periods. The MSCI World Sovereign Debt Index returned 1.2% and 4.4% in the same respective periods.

MSCI’s Security Selection Index–which contains long/short equity, long-only, market neutral equity and short funds–returned 3.1% in April, bringing its year-to-date return through April into positive territory, at 3%. In March, the Security Selection Index returned 0.1% (preliminary returns were 0.2%).

The MSCI Specialist Credit Index also produced solid results in April, with preliminary monthly returns of 1.7% and year-to-date returns of 5.4%. March returns were revised slightly to 0.8% from a preliminary 0.7%. This grouping contains distressed securities funds, long/short credit funds and private placement funds.

Funds focused on futures trading, global macro and other directional strategies returned 1.3% in April, according to the MSCI Directional Trading Index. Year-to-date returns for that index are 5.1%, using final March returns of negative 3.5%. The preliminary March return was negative 3.9%.

The Relative Value index, classified by MSCI as arbitrage funds of various types, returned 0.9% in April and was up 3.5% year-to-date through April. Final March returns were 0.5%, revised from the preliminary result of 0.6%.

Event-driven and multi-process hedge funds tracked by MSCI in the Multi-Process Group Index returned 0.7% in April and 2.4% in the first four months of the year. The Multi-Process Group Index final return for March was 0.5%, down 0.3% from the preliminary return of 0.8%.

April’s preliminary data are based on reports from 57% of funds in the composite reporting.

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