There’s still a week left to the month, but so far May has not been a merry month for hedge funds. Industry watchers say the recent sell-off in the commodities markets, as well as a spike in emerging markets, may have erased much of the sparkling gains hedge funds made this year, with some funds down at least 2% to 6% this month. Some say the losses have more to do with nervous hedge fund managers taking profits from a strong beginning of the year. According to Dow Jones Newswires, those percentage drops represent about half their gains, but for others, the pain may be a bit dulled.
“There are a few funds down 10%, but they are funds that recently posted monthly gains of 10% to 15%,” an unnamed prime brokerage official told the Financial Times. The FT reports that Aspect Capital lost 8% in one week, while Landsdowne Partners, another U.K. fund, fell 4.1%. Among the big losers, says DJN, are hedge funds in emerging markets, currencies and bonds – and they may be in for a still-bumpier ride. But there is a silver lining for others, as global macro funds are expected to profit from a weakening U.S. dollar and drooping commodities.
