Hedge funds started the second quarter on a positive note, extending their March rally, Hedge Fund Research reported Friday.
The HFRI Fund Weighted Composite Index gained 1% in April, reversing a first-quarter loss. Year to date, hedge funds are up 0.3%.
The HFRI Asset Weighted Composite Index added 0.2% for the month, but this index is still underwater, down 2% for the year.
Fixed income-based relative value arbitrage strategies were the top gainers in April, up 2.1%, as credit and arbitrage deal spreads tightened and U.S. treasury yields rose for the month, HFR reported. This was relative value funds’ best monthly return since September 2009, raising performance for the year to 1.5%.
The HFRI event-driven index gained 1.5% in April, lifting year-to-date returns to 1%. Activist and distressed exposures led the way, up 3.2% and 3%, while merger arbitrage was down 0.8%.
Equity hedge funds advanced 1.3% in April, with a huge boost from energy and basic materials, which added 5.2%; the energy index is now up 9.2% year to date.