Hedge funds show their strength in times of market volatility, an eVestment researcher says.

Hedge funds produced an aggregate return of 1.2% in April, bringing their year-to-date return to 2.9%, eVestment reported Friday.

By comparison, the S&P 500 index was up 1% in April, and has gained 1.9% for the year.

Rebounds in Russia and Brazil helped emerging markets hedge funds post their strongest returns since March 2013, up 6.3%, and making them April’s top-performing strategy.

Long/short equity funds returned 1.5% in April, influenced by exposure to European equities, according to the report. U.S.-focused long/short funds slightly underperformed the S&P in April, up 0.7%, but have produced returns in line with the S&P 500 index in 2015.

Global macro funds were caught by the currency and commodity trend shifts in April, declining 0.7%. However, macro funds with more than $1 billion under management performed relatively well, returning an average of 2.2%, which put large players in this strategy up 3.5% year to date.

Global macro funds are among the best performing segments of the industry this year.

Distressed hedge fund strategies returned 0.7%, their third consecutive monthly increase. Through January, distressed investors had endured a seven-month drawdown, which produced average declines of 6.8%.

Credit hedge funds and event-driven strategies both produced positive performance in April, up 2.3% and 1.4%, respectively.

Hedge funds’ generally positive performance in April came in the face of global financial and geopolitical volatility, eVestment said.

“It’s easy to undervalue the importance of hedge fund strategies and active management in general during the bull market we’ve enjoyed for the last few years,” eVestment’s head of research and author of the new report Peter Laurelli said in a statement.

“It’s when things become less certain and more volatile that hedge funds really show their strength for investors looking to diversify with a variety of investment types as they seek to grow and protect their assets.”

Winning Streak Ends

The hedge fund sector produced on glaring weak spot in April.

Managed futures funds ended a five-month winning streak, falling 0.7%. Since October, they had produced cumulative returns of nearly 6%.

eVestment said the declined had come as the dominant trends of dollar strength and declining oil priced both shifted in April.

The report said large managed futures strategies, the chief beneficiaries of investor interest that had returned to the segment in first quarter, suffered some big losses in April.

Returns from funds with more than $1 billion under management were down 3.6% during the month.

Thus ended eight consecutive months of gains during which these large managed futures funds returned an average of +17.9%.

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